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  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

12/23/05  Chipotle Mexican Grill Inc        S-1/A                  7:193                                    Merrill Corp/New/- FA

Document/Exhibit                   Description                      Pages   Size 

 1: S-1/A       Pre-Effective Amendment to Registration Statement   HTML  1,056K 
                          (General Form)                                         
 2: EX-3.1      Articles of Incorporation/Organization or By-Laws   HTML     81K 
 3: EX-3.2      Articles of Incorporation/Organization or By-Laws   HTML     90K 
 4: EX-5.1      Opinion re: Legality                                HTML     16K 
 5: EX-10.5     Material Contract                                   HTML    107K 
 6: EX-10.6     Exhihit 10.6                                        HTML    145K 
 7: EX-23.1     Consent of Experts or Counsel                       HTML      7K 

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TABLE OF CONTENTS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

As filed with the Securities and Exchange Commission on December 23, 2005

Registration No. 333-129221

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

CHIPOTLE MEXICAN GRILL, INC.
(Exact name of registrant as specified in its charter)

1543 Wazee Street, Suite 200
Denver, CO 80202
(303) 595-4000
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Montgomery F. Moran
Chipotle Mexican Grill, Inc.
1543 Wazee Street, Suite 200
Denver, CO 80202
(303) 595-4000
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Approximate date of commencement of proposed sale of the securities to the public:
As soon as practicable after this Registration Statement becomes effective.

        If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. o

        If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: o                 

        If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: o                 

        If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: o                 

        If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box: o                 

CALCULATION OF REGISTRATION FEE

(1)

Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o).

(2)

Including shares of class A common stock which may be purchased by the underwriters from the selling shareholder to cover over-allotments, if any.

(3)

Previously paid.

        The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to such Section 8(a), may determine.

   
EXPLANATORY NOTE

        We intend to have two versions of our prospectus included in this registration statement. In addition to a paper version, when we amend this prospectus to include an anticipated price range, we plan to maintain an electronic version at www.chipotleipo.com. The electronic version will be identical to the paper version except that persons viewing the electronic version of our prospectus will be able to access a selection of our print, radio and television advertisements by following a link under the caption "Prospectus Summary." The script of these items and a description of the graphics used in them is provided in Annex A beginning on page A-1.

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not is an offer to sell these securities and we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

PROSPECTUS (Subject to Completion)

Issued December 23, 2005

7,878,788 Shares

CLASS A COMMON STOCK

Chipotle Mexican Grill, Inc. is offering 6,060,606 shares of our class A common stock and McDonald's Ventures, LLC, the selling shareholder, is offering 1,818,182 shares. This is our initial public offering and no public market exists for our shares. We anticipate that the initial public offering price will be between $15.50 and $17.50 per share.

We intend to apply to list our class A common stock on the New York Stock Exchange under the symbol "CMG."

Investing in our class A common stock involves risks. See "Risk Factors" beginning on page 10.

PRICE $              A SHARE

The selling shareholder has granted the underwriters the right to purchase an additional 1,181,818 shares of class A common stock to cover over-allotments. The underwriters expect to deliver the shares of common stock to purchasers on                           , 2006.

The U.S. Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

                          , 2006

 
TABLE OF CONTENTS

        You should rely only on the information contained in this prospectus. No one is authorized to provide you with information that is different from that in this prospectus. We and the selling shareholder are offering to sell, and seeking offers to buy, shares of our class A common stock only where those offers and sales are permitted. The information in this prospectus is accurate only as of the date of this prospectus, regardless of when this prospectus is delivered or any sale of our class A common stock occurs.

        Until                        , 2006 (25 days after the date of this prospectus), all dealers that buy, sell or trade our class A common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

        Neither we nor the selling shareholder has taken any action to permit a public offering of the shares of our class A common stock outside the United States or to permit the possession or distribution of this prospectus outside the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our class A common stock and the distribution of this prospectus outside of the United States.

        When we amend this prospectus to include an anticipated price range, we plan to have a separate website, www.chipotleipo.com, where you can access an electronic version of our prospectus that includes samples of our print, radio and television advertisements.

        Except as the context otherwise requires, "Chipotle," the "Company," "we," "our" or "us" refer to Chipotle Mexican Grill, Inc. and its consolidated subsidiaries. "McDonald's" refers to McDonald's Corporation or, as the context requires, McDonald's Ventures, LLC.

        "Chipotle," "Chipotle Mexican Grill," "Chipotle Mexican Grill (in stylized font)," "Unburritable," "Food With Integrity," "Fresh Is Not Enough Anymore," "The Gourmet Restaurant Where You Eat With Your Hands," the Chili Pepper Logo design, the Foil Burrito design and the Chipotle Medallion design are U.S. registered trademarks of Chipotle.

i

   
PROSPECTUS SUMMARY

        This summary highlights information contained elsewhere in this prospectus. It does not contain all of the information that may be important to you in making your investment decision. You should read the entire prospectus carefully, including the section describing the risks of investing in our class A common stock entitled "Risk Factors" and our financial statements and related notes included elsewhere in this prospectus, before deciding to buy our class A common stock.

   
CHIPOTLE MEXICAN GRILL, INC.

When a Chain Isn't a "Chain"

        When Chipotle (pronounced chi-POAT-lay) opened its first store in 1993, the idea was simple: demonstrate that food served fast didn't have to be a "fast-food" experience. We use high-quality raw ingredients, classic cooking methods and a distinctive interior design, and have friendly people to take care of each customer—features that are more frequently found in the world of fine dining. When we opened, there wasn't an industry category to describe what we were doing. Some 12 years and more than 460 stores later, we compete in a category of dining now called "fast-casual," the fastest growing segment of the restaurant industry, where customers expect food quality that's more in line with full-service restaurants, coupled with the speed and convenience of fast food.

        Our revenue was $470.7 million in 2004, a 130% increase from 2002 and a 49% increase from 2003, driven by new store openings and increased average store sales. Average store sales grew from $1,056,000 for 2002 to $1,274,000 for 2003, $1,361,000 for 2004 and $1,406,000 for the trailing 12-month period ended September 30, 2005, reflecting the growing consumer awareness of our brand. Strong growth in sales at stores open at least 13 full months, which we call comp store sales, is due mainly to an increase in the number of transactions processed at our registers. Our net income (loss) improved from a loss of $(7.7) million in 2003 to income of $6.1 million in 2004 and $33.4 million (inclusive of a non-recurring $20.3 million tax benefit) in the first nine months of 2005, and our earnings before interest, taxes, depreciation and amortization, or EBITDA, was $7.2 million in 2003, $27.9 million in 2004 and $43.7 million in the first nine months of 2005.

        McDonald's, our management and a small number of outside investors currently own Chipotle. McDonald's interest is about 91% and, after the offering, we expect McDonald's will own about 88% of the combined voting power of our outstanding stock and 69% of the economic interest in our outstanding common stock.

What We Do Really Well

        We try to do a few things really well, and we plan to keep this intentionally focused strategy as we grow. We elevate basic raw ingredients into food that's richer and more sophisticated through our recipes and cooking techniques. Similarly, our store design transforms simple materials in distinctive ways, giving our stores a style that's more architectural in nature and less dependent on standardized design elements. We respect our employees and invite them to share their ideas, which we think inspires them to take pride in their work and increases their dedication to our customers and our company.

"Food With Integrity"

        Our focus has always been on using the kinds of higher-quality ingredients and cooking techniques used in high-end restaurants to make great food accessible at reasonable prices. But our vision has evolved. While using a variety of fresh ingredients remains the foundation of our menu, we believe that "fresh is not enough, anymore." Now we want to know where all of our ingredients come from, so that we can be sure they are as flavorful as possible while understanding the environmental and societal impact of our business. We call this idea "food with integrity," and it guides how we run our business.

•

Using higher-quality ingredients.  We use a variety of ingredients that we purchase from carefully selected suppliers. We concentrate on where we obtain each ingredient, and this has become a cornerstone of our continuous effort to improve our food. Some of the ingredients we use include naturally raised pork, beef and chicken, as well as organically grown and sustainably grown produce, and we continue to investigate using even more naturally raised, organically grown and sustainably grown ingredients, in light of pricing considerations.



•

A few things, thousands of ways.  We only serve a few things: burritos, burrito bols (a burrito without the tortilla), tacos and salads. We plan to keep a simple menu, but we'll always consider sensible additions. For example, we introduced the burrito bol in 2003—just when the popularity of low-carbohydrate diets exploded—and estimate that we sold about seven million of them in that year. In 2005, we also rolled out a salad.

We believe that our focus on "food with integrity" will resonate with customers as the public becomes increasingly aware of, and concerned about, what they eat.

Our Employees Set Us Apart

        We believe that our front-line crew differentiates the Chipotle experience. Virtually all of what our crew does is in view of customers, and because the person who prepares the food is often the same person who serves it, our employees have a strong sense of pride in their work. We think this and our crew's commitment to our vision contribute to better execution and service and are reflected in our crew turnover rate, which we believe is lower than the average in our industry.

No Two Stores Are The Same

        The design of each Chipotle store reflects the same idea as our food: a limited number of basic materials used in creative ways. We design each store individually to suit the space. Even the design of our chairs and artwork is unique to Chipotle. The design of our serving line and our open kitchens also exemplify our vision, demonstrating our commitment to cooking fresh food.

Customers Who Sell For Us

        We believe the best and most recognizable brands aren't built through advertising or promotional campaigns alone, but rather through deeply held beliefs evident in how a company runs its business. By adhering to this principle, we believe that Chipotle is becoming a highly recognized brand. We believe the single greatest contributor to our success has been word-of-mouth, with our customers learning about us and telling others. For example, some of our customers have gone so far as to develop websites about Chipotle. Our advertising has a low-key and irreverent tone that has been popular with customers. Our approach has captured the attention of some of the country's most renowned news media, including the Washington Post, Food and Wine magazine, the New York Times, and several well-regarded food critics, which we think is unusual in our segment of the restaurant industry. If you are reading an electronic version of this prospectus, which is available at www.chipotleipo.com, click ‹here› for a selection of our print, radio and television advertisements.

Rapidly Improving Financial Performance

        Our simple but effective approach has helped us build a sizeable and loyal customer base and resulted in rapidly improving financial performance over the last decade. Our revenue was $470.7 million in 2004, a 130% increase from 2002, driven by new store openings and increased average store sales. During 2002, 2003 and 2004, we opened 237 stores in total. Increases in average store sales have occurred partly because the time it takes for our new stores to achieve planned sales volumes, or ramp up, has consistently shortened as we've grown and customers have learned about our brand, enabling new stores to open with higher average sales. Average sales for new stores in the first 90 trading days increased 29.4% to $303,390

2

for stores opened in 2004 from $234,450 for stores opened in 2002. We've also had strong growth in comp store sales, due mainly to an increase in the number of transactions.

Management's Passion, Not Just Experience

        Our senior management is comprised of people who bring a mix of restaurant and business experience to their work. But most importantly, the team is committed to making Chipotle's vision a part of all facets of our business. Steve Ells, our founder and Chief Executive Officer, holds a degree from the Culinary Institute of America. Monty Moran, our President and Chief Operating Officer, joined Chipotle in March 2005, previously serving as chief executive officer of a private law firm, and as general counsel of Chipotle for much of our history. Jack Hartung, our Chief Finance and Development Officer, joined Chipotle in 2002, after spending 18 years with McDonald's, where he held a variety of management positions, including vice president and chief financial officer for McDonald's Partner Brands group. Bob Wilner, our Chief Administrative Officer, joined Chipotle in 2002, and previously served as vice president of human resources for McDonald's Partner Brands group. Together, our senior management team will beneficially own about 5% of the combined voting power of our outstanding stock and 4% of the economic interest in our outstanding common stock after this offering.

Where We Go From Here

        We believe that our growth has been driven by the appeal of our food, the clarity of our vision, the increasing strength of our brand and our commitment to constantly improving our customer experience. We anticipate that our growth plans for the foreseeable future will continue to be rooted in these fundamentals as we bring the Chipotle experience to more people.

Focusing On Our Vision to Appeal to Customers

        Our menu is intentionally simple. By focusing on just a few menu items, we can concentrate our effort on doing a few things very well. We believe that by focusing on the details of quality, service and the Chipotle experience, we'll be able to bring great food and our vision to new customers and keep existing customers coming back. We believe that consumers' increasing concern about the food they eat will foster demand for higher-quality foods. We believe this, in turn, will attract the interest and capital investment of larger farms and suppliers, and help us make our food more accessible, although we'll continue to balance our interest in advancing "food with integrity" with our desire to provide great food at reasonable prices.

Expanding Our Operations and Sales

        We plan to increase both sales and profits by opening new stores and increasing comp store sales:

•

Building More Stores.  We plan to grow in a measured and disciplined way by strategically adding stores in existing and new markets. We plan to open at least 75 stores in 2005, of which 58 were already open and 17 were under construction on October 31, 2005. We believe most of our sales increases will come from opening new stores.



•

Selling More Food Every Day.  We continue to focus on ways to improve the customer experience at our existing stores so we can increase comp store sales. We believe that the best way to do this is to speed up our service to sell food to more customers. We're doing this by, for example, enhancing our staffing and training models, expanding our use of fax service lines and implementing our new online ordering system. These changes allow us to accommodate more customers and larger orders without disrupting store traffic. We'll also consider additions to our menu that could enable us to enhance sales. For example, in 2005 we rolled out a salad that uses essentially the same ingredients as our burritos and tacos. We believe that another way we can grow sales is by getting more people to try our food. We hope to keep expanding brand awareness.

3

Risks of Investing in Chipotle

        Our business involves various risks, including the rapid increase in the number of our stores; various aspects of our relationship with McDonald's, including our ability to manage relationships and obtain services McDonald's currently manages or obtains on our behalf; our lack of independent operating history as a large company; our ability to continue to grow and to manage our growth effectively; our expansion into new markets; continued competitive pressures; health and safety concerns about the ingredients we use; credit and debit card fraud; sabotage of our information systems; and our ability to continue inspiring pride in our store managers and crews and to maintain our culture. In addition, McDonald's will continue to be able to exert a controlling influence over all matters requiring shareholder approval after the offering, including the election of directors and significant business transactions. You should carefully consider the risks discussed in "Risk Factors" before deciding to invest in our class A common stock.

Share Reclassification

        Currently we have one class of common stock and three classes of preferred stock outstanding. Each share of our outstanding common stock and each share of our outstanding preferred stock will be reclassified into one-third of one share of class B common stock in connection with this offering, which will result in a decrease in the number of shares outstanding. We also plan to amend our certificate of incorporation and bylaws and increase our total authorized number of shares of capital stock. All of this will be effective when we complete this offering. After the offering, we will have no outstanding preferred stock and two classes of common stock. In this prospectus, we refer to all of these actions together as the "Reclassification." The Reclassification will take place immediately prior to the closing of this offering. Except where otherwise noted, the description of the terms of our charter documents in this prospectus reflects the terms of those documents as they will exist following the Reclassification. Throughout this prospectus, we have revised the per share data for common stock to reflect the effect of the one for three reverse common stock split that is a part of the Reclassification.

        In this offering, both we and the selling shareholder are selling shares of class A common stock, which will have fewer votes per share than our class B common stock. Under the terms of our amended certificate of incorporation, one of the features of the class B common stock is that any holder of shares of class B common stock, including the selling shareholder, will have the right to convert those shares to shares of class A common stock at any time prior to a tax-free distribution of such shares to McDonald's shareholders (including a distribution in exchange for McDonald's shares or securities). In addition, prior to any such distribution, under the amended certificate of incorporation, shares of class B common stock can only be transferred to McDonald's or its subsidiaries, and any other transfer of such shares will result in the automatic conversion of those shares to shares of class A common stock without action by the transferor or transferee. Thus, although all of the shares that the selling shareholder will receive in connection with the Reclassification will be shares of class B common stock, any shares that investors will receive from the selling shareholder in the offering will be shares of class A common stock.

Future Dispositions

        After the completion of this offering, McDonald's will beneficially own common stock representing 88% of the combined voting power of our outstanding stock and 69% of the economic interest in our outstanding common stock (or 87% and 65%, respectively, if the underwriters' over-allotment option is exercised in full). McDonald's has informed us that, at some time in the future, but no earlier than the expiration of the lock-up period, it may sell all or a portion of its ownership interest in us or may make a tax-free distribution to its shareholders of all or a portion of that interest, including a distribution in exchange for McDonald's shares or securities (or another similar transaction). Any such sale, distribution or exchange (or other similar transaction) would be subject to various conditions, including receipt of any necessary regulatory or other approvals, the existence of satisfactory market conditions, and, in the case of a tax-free transaction, McDonald's receipt of a private letter ruling from the Internal Revenue Service

4

and/or an opinion of counsel that such sale, distribution or exchange (or other similar transaction) would be tax-free to McDonald's and its shareholders. The conditions to such a sale, distribution or exchange (or other similar transaction) may not be satisfied, or McDonald's may decide not to consummate such a sale, distribution or exchange (or other similar transaction). McDonald's has no obligation to pursue or consummate any further dispositions of its ownership interest in us by any specified date or at all, whether or not these conditions are satisfied. A sale or other disposition of our common stock by McDonald's could depress the price of our class A common stock.

Incorporation and Principal Executive Offices

        The first Chipotle restaurant opened in 1993. We have been a subsidiary of McDonald's since February 1998, and McDonald's beneficially owns about 91% of our voting stock. McDonald's acquired a controlling stake in us at the same time that our predecessor, World Foods Inc., a Colorado corporation formed in 1996, merged with Chipotle Mexican Grill, Inc., a Delaware corporation. Chipotle Mexican Grill, Inc., was the surviving entity in the merger. Our main office is located at 1543 Wazee Street, Suite 200, Denver, Colorado, and our telephone number is (303) 595-4000.

5

THE OFFERING

        The numbers of shares of common stock that will be outstanding after this offering is based on 26,434,013 shares outstanding at December 15, 2005, including non-vested shares subject to forfeiture, after giving effect to the reclassification of each share of our outstanding common stock and each share of our outstanding preferred stock into one-third of one share of our class B common stock in the Reclassification, which will result in a decrease in the number of shares outstanding, and excludes:

•

228,666 shares of class A common stock issuable upon the exercise of options outstanding at September 30, 2005 at a weighted average exercise price of $16.25 per share; and



•

shares of class A common stock reserved for future issuance under our Chipotle 2006 Stock Incentive Plan.

        Except as otherwise indicated, all information in this prospectus gives effect to the Reclassification and assumes no exercise of the underwriters' option to purchase up to an additional 1,181,818 shares of class A common stock from the selling shareholder to cover over-allotments.

6

   
SUMMARY CONSOLIDATED FINANCIAL DATA

        Our summary consolidated financial data shown below should be read together with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes included elsewhere in this prospectus. The summary consolidated statements of operations data for the years ended December 31, 2002, 2003 and 2004 have been derived from our audited consolidated financial statements included elsewhere in this prospectus, and the summary consolidated statements of operations data for the nine months ended September 30, 2004 and 2005 and the balance sheet data at September 30, 2005 have been derived from our unaudited consolidated financial statements and include all adjustments consisting only of normal recurring adjustments necessary for a fair presentation of the results of the interim periods.

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(1)

We are not a separate taxable entity for federal and most state income tax purposes and our results of operations are included in McDonald's consolidated federal and state income tax returns; however, the provision for income taxes is calculated on a separate return basis. At December 31, 2004, we had incurred total net operating losses, or NOLs, of $139.4 million since our inception as a "C" corporation on January 1, 1996. We incurred $118.0 million of these NOLs after McDonald's acquisition of over 80% of our equity. The remaining $21.4 million of these NOLs relates to separate return limitation year ("SRLY") losses before McDonald's acquired over 80% of our equity and will begin to expire in 2012. Through December 31, 2004, we recorded a valuation allowance to offset our deferred tax assets, including those related to the NOLs, net of deferred tax liabilities. During the nine months ended September 30, 2005, we determined that it was more likely than not that we would realize our deferred tax assets and we reversed our valuation allowance, resulting in a net tax benefit of $10.8 million in our results of operations. During the nine months ended September 30, 2005, we also realized $8.5 million of SRLY losses which reduced goodwill but did not impact our results of operations.

(2)

Historical earnings (loss) per common share and shares used in computing historical earnings (loss) per common share do not reflect the effect of the Reclassification nor the conversion of stock appreciation rights into stock options.

(3)

The adjusted earnings (loss) per common share and shares used in computing adjusted earnings (loss) per common share presented give retroactive effect to the one for three reverse common stock split to be executed as part of the Reclassification and to the conversion of stock appreciation rights into stock options.

(4)

Includes company-operated stores only. We also have three franchisees who operated five, seven and eight stores at the end of 2002, 2003 and 2004, respectively, and eight stores at September 30, 2004 and 2005.

(5)

Includes company-operated stores only. We define "average store sales" as the average trailing 12-month sales for company-owned stores in operation for at least 12 full months. As average store sales are computed using the same periods for all of our stores, they do not include sales during the stub portion of the month in which a store begins operating.

(6)

Includes company-operated stores only. Represents the change in period-over-period sales for the comparable store base. A store becomes comparable in its 13^th month of operation. As comp store sales are computed using the same periods for all of our stores, they do not include sales during the stub portion of the month in which a store begins operating.

(7)

Includes company-operated and franchised stores.

(8)

Represents net income (loss) before deductions for interest, income taxes, depreciation and amortization. We believe that EBITDA is useful to investors as a measure of comparative operating performance, as it is less susceptible to variances in actual performance resulting from depreciation,

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amortization and other non-cash charges and more reflective of changes in pricing decisions, cost controls and other factors that affect operating performance. We also present EBITDA because we believe it is useful to investors as a way to evaluate our ability to incur and service debt, make capital expenditures and meet working capital requirements. EBITDA is not intended as a measure of our operating performance, as an alternative to net income or as an alternative to any other performance measure in conformity with U.S. generally accepted accounting principles or as an alternative to cash flow provided by operating activities as a measure of liquidity. The following is a reconciliation of net income (loss) to EBITDA:

*

See note (1) above.

(9)

The pro forma balance sheet data at September 30, 2005 reflect the Reclassification and the conversion of stock appreciation rights into stock options.

(10)

The pro forma as adjusted balance sheet data at September 30, 2005 reflect the Reclassification, the conversion of stock appreciation rights into stock options and the application