Good afternoon. And welcome to the Chipotle Mexican Grill Third Quarter 2013 Earnings Conference Call. All participants are now in listen-only mode. After the speakers’ remarks there will be a question-and-answer session. (Operator Instructions). As a reminder this conference is being recorded. I would now like to introduce Chipotle’s Director of Investor Relations, Alex Spong. You may begin.

Thanks Amber. Hello everyone, and welcome to our call today. By now you should have access to our earnings announcement released this afternoon for the third quarter 2013. It may also be found on our website at chipotle.com at the Investor Relations section. Before we begin our presentation I will remind everyone that parts of our discussion today will include forward-looking statements as defined in the securities laws. These forward-looking statements will include projections of the number of restaurants we intend to open, comp restaurant sales increases, potential menu price increases, trend in food costs, marketing spend, G&A and other expense items, effective tax rates, stock repurchases and shareholder returns, as well as other statements of our expectations and plans. These statements are based on information available to us today and we are not assuming any obligation to update them. Forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from forward-looking statements. We refer you to the Risk Factors in our annual report on Form 10-K as updated in our subsequent Form 10-Qs for a discussion of these risks. Our discussion today will include non-GAAP financial measures, a reconciliation of which can be found on the presentation page of the investor relations section of our website. I’d like to remind everyone that we’ve adopted a self-imposed quiet period, restricting communications with investors during that period. The quiet period begins on the first day of the last month of each fiscal quarter and continues until the next earnings conference call. For the fourth quarter it will begin in January and continue through our fourth quarter release. On the call with us today are Steve Ells, our Chairman and Co-Chief Executive Officer; Monty Moran, Co-Chief Executive Officer; and Jack Hartung, Chief Financial Officer. With that I’ll now turn the call over to Steve.

Thanks Alex. I am pleased with our results for the third quarter and the continued strength of our business throughout the year. During the quarter we generated revenue of $826.9 million, an increase of 18% from the third quarter of 2012. Comparable restaurant sales grew by 6.2% in the quarter and diluted earnings per share increased 17.2% to $2.66. These results are the product of our combined focus of our special food and our special people cultures. This focus is helping us realize our vision of changing the way people think about any fast food. Throughout the quarter we continued to make progress in each of these areas. We introduced more customers to the new menu item, Sofritas, expanding our catering program, continued our quest to remove GMOs from our food, develop more Restaurateurs and field leaders, brought our field leadership together for a conference to share thoughts on how they might become more successful and continued to nurture the seeds we have planted for our future growth. During the quarter we expanded the rollout of Sofritas, the vegan option we have been testing in our West Coast restaurants and that is now available in all of our restaurants in California, Oregon, Washington, Colorado, New Mexico, Idaho and Utah or about 25% of the restaurants overall. Recall that Sofritas is an organic artisan tofu that is braised with chipotle peppers, roasted poblanos and a blend of aromatic herbs and spices. We are encouraged by what we are seeing with Sofritas so far. It currently accounts for over 4% of sales in the restaurants’ where it’s offered. And our customers, including vegans, vegetarians, and meat eaters alike really seem to enjoy its complex and bold flavors. In developing Sofritas our aim was to create a menu item that would offer another…

Thank you, Steve. To advance our objective of developing restaurant cultures with teams of all top performers who are empowered to achieve high standards we held a Field Leadership Conference in Las Vegas last month. Our aim in hosting this meeting was to bring together all of our field leaders, Restaurateurs, apprentice team leaders, area managers, team leaders, team directors and regional directors to lay out very clear expectations about their priorities and to provide them with tools to help them with the most vital aspects of their jobs, which is developing Restaurateurs and Restaurateur cultures. To help better prepare our field leaders to do this we clearly laid out expectations for them in terms of how to best use their time in their restaurants, we shared new tools with them to help them identify and diagnose opportunities in their restaurants and we conveyed thoughts in how they can dedicate themselves fully to developing teams of top performers empowered to achieve high standards. We continue to make progress in developing and expanding our Restaurateur programs by developing 28 new Restaurateur’s in the quarter, which now gives us a total of 409 Restaurateurs, 40 apprentice team leaders as well as 47 team leaders. But I know we can do much better and I am confident that we will over the next year because our field leadership structure is better staffed, the tools we provided at the conference are the best and most impactful we’ve ever had and we experience the incredible energy and commitment of our field leaders at the conference and as we leaving the conference to go back to their patches. So while I am happy with our current development of Restaurateur cultures in our restaurants I do expect to see a significant uptick over the next few quarters…

Thanks, Monty. We are pleased with the strength of the underlying business trends during the third quarter, despite operating in a very competitive industry and with mixed signals about the strength of consumer demand we continue to show improved traffic as more and more people chose to visit our restaurants. Our top performing crews and management teams continue to delight new and existing customers by providing an exceptional dining experience to our customers during their each and every visit. Our same-store sales were up 6.2% in the third quarter and our average sales volume for restaurants that have been open for at least 12 months is $2,140,000, the highest that it’s ever been. Overall sales for the quarter increased 18% to $826.9 million driven by new restaurant openings and a comp of 6.2%. Year-to-date sales were $2.37 billion, an increase of 16.7%. The quarter and year-to-date comp increase was driven by increased customer visits. We are pleased to see our underlying transactions accelerate sequentially during the year from an underlying comp of 3% in the first quarter to an effective 4.5% comp in Q2 to the 6.2% comp we saw in the third quarter. Our improving sales trends are benefiting from the greater awareness we believe we are achieving with our marketing campaigns, as Steve talked about, as well as from faster throughput, as Monty mentioned. Our comps accelerated around the end of July or beginning of August and have continue at that higher level though September and now in to October. Assuming these trends continue through the rest of the year we would expect Q4 comps will be similar or slightly better than what we saw in Q3. As a result of these stronger trends we are raising our full year comp guidance for 2013 to mid-single-digits up from…

Yes, thank you. (Operator Instructions). We’ll go to Matthew Difrisco with Lazard Capital. Matthew Difrisco – Lazard Capital: Thank you, very much. I was just curious about sort of the international strategy and the success that you were speaking of as far as the volumes in the U.S. Can you speak about the volumes that you are seeing internationally in respect of markets and what that might mean for growth in ‘14 and beyond as far as more meaningful growth potentially?

Yeah, I would still expect over the next year or so that international won’t be a very large part of our growth. We are still in the brand building phase. There is still the vast majority of people in the markets we are in, in outside the US are not yet aware of Chipotle. We are seeing nice growth trends in the restaurants that we have opened. Most of the restaurants we have opened in London for example have gone [comp] and the comps we’re very pleased with the comps, but the awareness level is still very low. And so I would expect to not see the number of restaurants be meaningful part of our growth. And in terms of sales you know the sales are, when you convert to dollars are attractive. I would call them in the same ballpark. We are similar level to what we are seeing in the U.S. but because costs are much higher we are in major cities there, the rents are higher, there are social cost that are higher as well. So that as awareness builds we expect those volumes will grow over time to a much more significant level than our average in the U.S. Matthew Difrisco – Lazard Capital: And then ShopHouse as well, are they seeing similar type volumes or is that too early to tell on the LA market?

I think it’s too early to talk about the volumes of ShopHouse. I would say though we are really focused on building a great in-store experience and introducing a new kind of Asian cuisine than most fast food customers are accustomed to and if I compare teaching them about this new kind of cuisine and the ordering system it’s much the same as it was at Chipotle 20 years ago. I would say though that it’s going a lot faster. Our growth at ShopHouse is much faster than Chipotle was in their early days. But really now we are just building better awareness and improving on the customer experience and introducing people to a new kind of Asian cuisine and if we do this all very well I think we’ll be preparing ourselves for future growth potential which is really what it’s all about. Matthew Difrisco – Lazard Capital: Excellent, thank you very much.

We’ll go next to Jason West with Deutsche Bank. Jason West – Deutsche Bank: Yeah, thanks. Just a question around the pricing. Can you guys talk about sort of magnitude what that might be and the timing? I think you said mid-year and I guess what SKU you are thinking there earlier or later in the year?

Yeah Jason we are not going to make a decision today on pricing but I think that it’s probably in kind of a mid-single digit range, whether that’s 3, 4, 5 kind of percent. What it will depend on is what happens with general ingredient inflation between now and then and then what it costs us to remove GMOs from the rest of our ingredients. Once we have all that information at hand we’ll be able to do a better job of figuring out what the price increase might be. And in terms of timing it’s really hinging more on removing GMOs. We’d really like to make more progress, understand what that’s going to cost, how much time that’s going to take, all that kind of stuff and then we’ll feel better about coordinating a price increase around the time that we’re removing GMOs and we think that there might be an opportunity as well. We think it will be a pretty exciting time for us when we can announce that. We are not aware of any other restaurant company anywhere near our sight that’s even attempting to do this and so to actually accomplish it will be pretty exciting and we’d like to time that excitement around with the price increase. Jason West – Deutsche Bank: Okay that’s helpful. And just one other one on that throughput opportunity Monty, you talked about some nice lifts in the peak lunch period, I think five transactions per hour. Can you remind us what the sensitivity is to comps for say each transaction per hour improvement that you see on throughput and so kind of how that flows through comps?

Yeah Jason it just it really, really depends store-by-store. I mean we generally say that there isn’t a direct tie to comps in the sense that if you have certain amount of people in line at lunch and you go faster you might serve them from the twelve to one hour as opposed to the one to two hours, so in various quarters in the past you’ve heard me say that at times we had an increase in the comp sales or comp transactions in the peak lunch hour only to lose a few in the one to two o’clock hour, sort of cannibalizing from ourselves that kind of thing. So initially speeding up throughput does not automatically generate a comp unless it’s done in a restaurant where people are walking away from the back of the line and a shorter line would have kept them. But that being said we do see over time a really nice correlation between our ability to continue to move faster and customers willingness to come to Chipotle, willingness to wait in line and so forth. So there is no formulae or way to measure that Jason. But we have absolute confidence that it’s one of the key drivers of our success, it’s one of the key ways in which we distinguish ourselves from competitors because we are so much faster. It’s really a huge advantage to us and it’s such a critical part of giving a great customer experience to our customers, most of whom would report the only thing negative about Chipotle is the need to wait in line. So we were able to improve substantially at the peak hour of lunch and substantially at the peak hour of dinner which makes us really, really proud and also we had faster comp transactions at absolutely every single hour of the day as well. So we are really pleased we are incredibly thankful to all of our teams in the field for generating that kind of throughput improvement which is really one of the most substantial we’ve achieved in any quarter I think in our history in terms of absolute numbers. Jason West – Deutsche Bank: Okay got it thanks for that.

We’ll go next John Glass with Morgan Stanley. John Glass – Morgan Stanley: Thanks first could you talk a little bit about the lift you are getting in the ad spending, in other words you said it’s some specific statistics where when you were on either air or advertising in a much certain material point you had a discernible lift. Could you talk about how great that lift was, how sustained it was and can you just tie it into what are you figuring your final ad spend will be round this year in total?

Yeah, John we’d rather not parse the components of the comp. Overtime we believe that if we does do a better job of hiring great people, empowering great people, great restaurateur cultures in our restaurants and they communicate well with our people, communicate this message about where our food comes from and that we really have skill and we use classic cooking techniques with these higher quality ingredients and we can do that with our ads in an automatic way because when our customers come into our restaurants, actually see that we are cooking and they can see the ingredients and we think all that adds up to creating a great experience, creating this feeling that people have where they trust and they enjoy coming to Chipotle. Steve had mentioned that we did see, we don’t often see this because a lot of our marketing is more about educating and encouraging people to be more curious about where their food comes from. But we did see in markets where we did advertise compared to markets that we didn’t advertise that we saw a lift and it was a meaningful lift. But in terms of saying how much of that was in the comp we’d rather not say. I would say in general though we believe going forward, we believe that in the past and going forward the vast majority of our comp is based on creating a great restaurant experience that the marketing should complement that. It should be authentic to what the actual experience is but we believe the vast majority of our comp will always be based on having wonderful people creating a wonderful dining experience. John Glass – Morgan Stanley: Then just two other follows. One is just on Jack do you have a view yet on food inflation next year and will, is it going to be the kind of thing where your pricing will be fully used to offset that or only partially, give a view generally in the basket for next year?

Yeah, I mean I wouldn’t say first of all it’s, great John. I don’t see anything that looks terribly troubling. So we would hope that we would stay in this kind of 33.5% to 34% range, not counting the extra cost related to removing the remaining GMOs. So if it stays in that range I would call that pretty tame. I mean I would mean from here we’ll be looking at a 1% to 2% inflation. And so if things don’t change, if weather doesn’t, if extreme weather doesn’t change things we think that our food cost should not rise very much. Then in terms of the menu price increase talking about this kind of mid-single digit we think that should be more than adequate to cover the inflation that we have seen so far as well as hopefully absorb the cost of removing GMOs as well and hopefully there will be some leftover to and we expect there would be some leftover to improve our margins as well. John Glass – Morgan Stanley: Okay, and just one final question. Steve, you mentioned in your comments about ShopHouse as one other example of how you are going to extend the platform at Chipotle into other brands. What would the timing be? I presume that means the 3rd and the 4th, correct me if I am wrong and if that’s the case how do you think about the right time to introduce those seed concepts to give them time to grow?

Do you mean grow the existing ones, John? John Glass – Morgan Stanley: No, I mean like have a third concept beside the first two you have and a fourth because you need time to let them expand so they become meaningful. I am just getting a sense of if that’s something imminent or something at a very long-term that you think about, not anytime in the next few years.

Sure, well if I think about the last 20 years I mean the vast majority was spent building the Chipotle brand really, really showing that there is a better fast food model. I mean we wrote – rewrote the fast food rules by introducing high quality ingredients and interactive service format and this concept of having empowered teams who are really top performing to deliver a different kind of experience. It takes a long time and we are really perfected – we are all perfecting this model and just a couple of years ago thought it was prudent to explore a different kind of cuisine. I think that if you could envision many different kinds of cuisines fitting into these models it is potentially the new fast food model. And while it would be exciting to open a bunch of different brands now, I think there is really an importance that we have learned at Chipotle of focus, on focusing on just doing a few things and doing them very, very well. Once you have done them very, very well and are confident things are moving forward nicely then you can layer on additional projects and challenges. We feel that we have got a really good pace going now with introducing the ShopHouse brand. We are really pleased with the results. I was in Washington D.C. ShopHouses two weeks ago and sitting down and talking to customers and the kinds of things that I heard coming from them were just music to my ears which was this food feels so good, I love the way it tastes, the kind of food that I want to come eat often. And it’s creating a dining experience that people want to have often which I think is really powerful. It’s the kind of thing that we heard about Chipotle in the early days and it’s the kinds of things that obviously drives Chipotle’s comps today. So we are going to focus on those two things right now. John Glass – Morgan Stanley: Thank you.

We’ll go next to Nicole Miller with Piper Jaffray. Nicole Miller – Piper Jaffray: Thanks, good afternoon. In talking about the development you outlined for next year, can you give us a little color on how many are maybe LOIs, time leases where you are accelerating development, is it existing market, new markets, is it international and how might it look by quarter? Thank you so much.

Yeah Nicole I think you are not going to see any particularly different in next year except for a little uptick in our development as we forecast in going up to higher number of new restaurants. But we are still going to have a similar ratio of new markets and proven markets and developing markets. You won’t see much additional work in international. We have talked about how we are working on Germany, we got that open and we’ll be again letting those stores mature. So you won’t see a significant push international. Again there is going to be a few additional ShopHouse restaurants and you won’t see a huge push there either because we want to really make sure that those brands are established, that we start to develop awareness and that we allow them to generate the kind of demand that will cause us to be able to respond by giving more supply. So I think you will see a lot more of what you are seeing now with a small number of A models. Again, we’ll look for as many A models as we can find this year, can end up being something like 25 for the year. Next year I would love to see that many again if we can find them. We are always out trying to find those opportunistic deals. But again I think you will see a very similar ratio of new markets to existing markets as you did this year, just a little bit more per quarter. And I think very level loaded again as best we can and we anticipate that they will be quite level loaded next year because the pipeline is very, very healthy right now. Nicole Miller – Piper Jaffray: Okay, it looks like that pre-openings dollars were just a little tiny bit weighted towards the back part of the year. So just want to make sure that we didn’t need to front end load anything in the next year but it sounds pretty even.

Yeah, the third quarter was pretty high, Nicole. we typically have pre-openings costs in kind of the $75,000 to $80,000 or $85,000range. This quarter I think was more like $120,000. That’s more a function of we’ve got a nice pipeline of openings teed up for the fourth quarter but those pre-opening costs they are incurred, most of that is rent, most of that preopening cost is rent. And so because of all the restaurants we got under construction, that we will open up for the fourth quarter we have a little bit disproportionate amount of the preopening cost hit in the third quarter. If you look at kind of year-to-date for 129 we have opened so far, our pre-opening cost averaged about $83,000 and I think that would be more normal. And so fourth quarter should return to a more normal pre-opening and then next year, as Monty said, we feel like the pipeline has set us up for reasonably level loaded, nothing too extreme to expect. Nicole Miller – Piper Jaffray: Thank you.

Thanks Nicole.

We will go next to Jeff Balmer with Wells Fargo. Jeff Balmer – Wells Fargo: Great, thanks. Just looking to follow up a little bit on pricing. I guess, how do you guys generally test a price increase if you are still doing that, would a price increase be across most of the menu, would it be most of the markets, how would you guys talk of a price increase this time around?

Yeah, we don’t really test it per se Jeff. What we do we go market by market and we look at competitors and we look at what prices they are charging and we look at item by item. So we look at sandwiches and burritos and drinks and things like that. And so we will look at the whole menu. It’s likely that the entire menu will be touched. But we – like for example if we had an overall average increase of 4%, we might increase some items higher, some items lower just based on what looks competitive out there in the market place. And end market-by-market, we’ll also look at what consumer demand looks like as well. If we feel like there is room to increase based on where our competitors are in terms of their pricing and we have healthy comp momentum as well that might cause us to take that particular market, that we are looking at and maybe inch up the price increase a bit there. And our expectation is that we will have increases in every single market, most of our markets by the time we get to next year there will be three years that we have had a price increase in any of the markets except for on the West Coast, when it would be more than two years. And so our expectation would be when we do this, we have a price increase it will be across all markets. Jeff Balmer – Wells Fargo: That’s helpful. Just one other quick one. just coming back to catering a bit, I think it’s been in Denver since the early part of this year, but really I am just looking for any color you can review on sort of the sales progression, you continue to point to approaching 1%, but I didn’t know if you started at 20-30 bips and its grown to 1% over the summer, and then any other sort of pieces of information you have learned as you rolled this out in to new markets in terms of potentially how they get customers little bit more on board with the idea of potentially using the catering service.

Yeah, Jeff we are learning a lot about catering, and we are not even been through a full season yet, what we did see though is the early summer was a lot bigger than any part of the rest of the year we have seen so far and that’s because of graduations. And so when we look at catering in markets like Denver that we’ve had it for the entire year, that was our peak season so far. We think we might be moving into another peaks season, now with the holiday and Steve motioned that we are be doing some advertising around that to encourage people to try it. The other thing we have seen is that the longer catering is in the market that generally we do see the catering build over time. Now it’s not a straight line because like I said there is seasonality where we had a lot more catering in the kind of graduation season in the May and June period. So it’s not a straight line, but generally like in Denver, it’s started out slower, and I would say Denver is higher than average. So when Monty talked about catering being, approaching 1%, the markets that have had it the longest are little higher than that. The market’s that have not had it as long are little lower than that in general, that’s not a perfect formula, but that’s generally what we have learned so far. And we do know that we have to create awareness and so I know that Mark is considering a number of ways in addition to advertising about how we can create more awareness. What we’ve found so far that is that when our customers get a chance to try the catering, it’s a really neat experience and they love every bit about it, they love the control, they love the food, the love the packaging, they really love everything about it. And so I know Mark’s working on a number of ideas in terms of how to encourage more people to try catering because we think that will help us continue to build the business. Jeff Balmer – Wells Fargo: Thank you for that thoughtful response.

We’ll go next to John Ivankoe with JPMorgan.

Hi guys it’s [Amod] filling in for John. You are very forward thinking on a lot of different things, including moving to non-GMO. I was curious what your thoughts are on development of a stronger mobile app platform and maybe more specifically how you could tie that into throughput? I know there is some companies out there that have mobile payment for instance and on top of that also layering in loyalty?

Yeah, that’s a great question. We are working on it. We have something that’s in, what I will call a beta test right now. We think it’s got a lots of opportunities right now. We just want to make sure that the technology works, just from the payment standpoint. If we come up with technology that has any glitches whatsoever it would kill us from the throughput standpoint. And so we have to make sure technology is perfect from that standpoint. And so we are working on that right now. Once we get that we do think there is a lots of opportunities to communicate with our customers to speed up throughput to communicate with our customers on a more customized way. Customers who haven’t been for a while, customers who have never tried guacamole for example. There is lots of ways to communicate but we are actively working on this and hopefully we will see something in 2014.

And then can you help us understand the non-GMO supply chain I don’t think a lot of us are that familiar with it. I would think that as you switch over to that it’s obviously a lot of demand probably coming on the market with a company of your size. So is the entirety of kind of the potential structural cost increase going to be passed on with the price increase that you take the middle of next year or should we expect cogs to just move up because of that?

Well we don’t know for sure but right now we don’t have many ingredients that have GMO and so while it’s complicated to change some of our recipes we’ve made very, very good progress so far with changing out some of the oils. We need to work now on our tortillas and there is just in some case it’s just small amounts like our flour tortillas, just small amounts of oil in the tortillas that we need to try different recipes with different oil and make sure that the taste is still delicious, that we can still roll the burritos, that they hold up well with our ingredients and things like that. So we don’t have that many GMO’s left so I wouldn’t say that we are going to have this huge demand per se. So we are hopeful that while it will cost more in our foods we hope it’s not, I think you are implying that it would be a dramatic increase in our food cost. We are hopeful that it’s not going to be dramatic, that it’s manageable and that the menu price increase that we are thinking about would more than cover the inflation we’ve seen so far and cover the GMO, the cost of removing the remaining GMO’s as well.

Okay, that’s helpful. Thank you.

Thanks.

We’ll go next to Nick Setyan with Wedbush Securities. Nick Setyan – Wedbush Securities: Hi thanks for taking my question. I’d just like to ask sort of a bigger picture question around how you guys think about pricing in general. I mean really just a function of your unique supply chain and the way you source the food? And to what extend do you think about competitive pricing within both fast casual and obviously the casual dining category has been lot more competitive in terms of pricing as well? To what extend does the competitive pricing come into that decision?

Well when we think about pricing we already have and had for a long time spent more money on our ingredients as a percentage of sales than our competitors or in fact more than any public company or company for which we have the records. And so we have high food cost and that’s not something that troubles us too much as long as we are able to run a very successful unit economic model, which we have been able to do primarily through having really high sales volumes in our restaurants. And so we do buy more expensive ingredients but that’s been something we’ve been doing for quite some time and our purchasing department is really, really good at going out and working, finding suppliers who are eager to do, raise animals or grow crops in ways that are consistent with our protocols. And so they are always working constantly on trying to increase the supply of those ingredients that are available to us so that we can continue to increase the amount of food and integrity that we serve in our restaurants. So the main thing the governs our thinking about pricing is that we want to continue to make this kind of – this new way of eating very accessible to people. So we want to keep our prices low so that our customers continue to enjoy this very different way of eating, but by the same token we want to still have a strong unit economic model and we have been able to do that by virtue of the fact that our food tastes better and we have high average unit volumes enough to cover this more expensive food cost. Nick Setyan – Wedbush Securities: Great. Thank you. And then just you mentioned the very strong pipeline in terms of development. Are you seeing a nice acceleration in new construction is that the key factor in why you are able to up the guidance for next year?

Yes, I think certainly – it is only a small part of it but yes, the answer is yes the amount of new construction has increased. It’s been increasing just incrementally each quarter over the last several quarters but it does continue to keep making up more and more of our future portfolio, just like it was making up correspondingly less and less of our portfolio after 2008 and 2009. But yes that amount of new construction has ticked up such that it’s exceeding 40% of the restaurants that we’ll see – that we will open in the fourth quarter of this year and probably a little bit higher than that for next year. So in other words more than 40% of the restaurants we open next year will come from new construction. So that amount keeps ticking up gradually as a result of more folks being willing to put their money into building new shopping centers and so forth. So that is helping us I think to find more great real estate. Nick Setyan – Wedbush Securities: Okay. And then just lastly I’ve been getting lot of pictures today from friends here in LA of your opening of ShopHouse in Santa Monica, looks like I can’t see the end of that line, there is a huge line out the door apparently and it goes all the way to the street.

That’s great news and again we’re really, really excited about the ShopHouse, not only about the team that we built but the incredible food and this different kind of food that we are making available to people. It’s an exciting way to eat and it’s fun to make this available to people.

We’ll go next to Bryan Elliott with Raymond James. Bryan Elliott – Raymond James: Good afternoon. Just a point of clarification on the move to non-GMO food is it the proteins need to be only fed non-GMO corn?

No, I mean right now if you want animals that have not eaten any GMO you have to find organic meat. And so when we talk about GMOs, right now there is really no way to find adequate supply of animals that have not eaten any crops containing GMO ingredients. So that is not what we’re talking about, when we’re talking about getting rid of GMOs right now, because none of the animals are obviously genetically modified, but animals in this country are eating grains that are often GMO. Another thing that I would mention Bryan just while you are clarifying that issue is that our soft drinks contain high fructose corn syrup which is a GMO ingredient. So there is not an effort on our part to eliminate GMOs from soft drinks. So this an effort to go through all of our food ingredients and remove GMOs from every single food ingredient that we serve. Bryan Elliott – Raymond James: Where possible, yes. Okay.

Where possible but we will be able to remove them all of our food ingredients, because again in animal that each GMO ingredient is not a typically a GMO, is not genetically modified organism because the organism is the animal. Bryan Elliott – Raymond James: All right I am sorry, maybe I misunderstood the soft drink comment then.

In making the distinction between food and drinks, I guess I am saying the soft drinks are... Bryan Elliott – Raymond James: And you really can’t get regular cane sugar drinks much in the U.S. anyway right?

I mean we always are looking at it, it’s very difficult to do at this point and certainly not from the main stream soft drinks that you would see. Bryan Elliott – Raymond James: Thanks so much.

Thanks Bryan.

We’ll go next to Steve Anderson with Miller Tabak. Stephen Anderson – Miller Tabak & Company: Good afternoon. A couple of a quarters ago you mentioned about having some of the breakdown of new units or looking more at food courts as a potential source of unit growth. Have you given any more thought to that as a percentage of your unit portfolio?

We are looking more at food courts per se, but as a part of our continuing expansion of our portfolio we have found success in a whole bunch of food courts settings. But there is a number of real estate locations that we call sort of non-traditional and in 2013 we had, we opened 13 food court locations by way of example. But it’s not that we are looking to increase that, we just are open to considering those kinds of locations as well as airports locations or highway locations and even military locations in the future is something we are looking to get more involved with. So we call all of those sort of non-traditional locations. If you talked to us five, six, seven, eight years ago we were very hesitant to get involved with locations like that because it was a time during which we were establishing the Chipotle brand and it was very, very important to us that we did so in a way that represented what we were doing. But as the awareness of chipotle has grown and as the demand for this new way of eating has grown it is been appropriate we find to go into some of those locations to allow folks the Chipotle experience in malls, airports , highway stops and other places that wouldn’t have considered while in that initial brand building stage. Stephen Anderson – Miller Tabak & Company: Thank you.

We’ll go next to David Tarantino with Robert W. Baird David Tarantino – Robert W. Baird & Co: Hi good afternoon. Jack just a question a follow up on how you are viewing the food cost ratio and if I look at how that has trended historically 33.5 to 34 is this high as its been in the last 10 years. And I just want to come back to the question of where you would like to see that food cost ratio long term and specifically where you’d like to get it to when you take the price increase at the middle of next year?

Yes, David. Our food cost generally is ranged between 31% up to around 34, it’s gotten as high as or close to 34% and that’s kind of the range that we are talking about right now as a perspective. While our preference would be around 32% seems to be kind of sweet spot. But the food cost isn’t as important as what our overall margin is and then what our return is. And so let me give you an example, just as perspective just on math if you push the math around a 4% price increase and if you have little or no resistance on that price increase the food cost will improve by about a 130 basis points. And so 4% now I am not considering the cost of GMOs but just to work through the math here. So our food cost which is now in a 33.5 % to 34% range now drops down much closer to that 32% or 32.5% range and so that’s nice. But the margin on a 4% price increase again it’s just based on today not taking other factors into account would increase by 250 basis points to 260 basis points or so. And so that would put us at all time high margins and even if there is more inflation and even with covering the cost of GMO’s there is a lot of room there for our overall margin to be kind of at record levels. It would give us the opportunity to have returns that are at or above what our record levels have been and our returns have been in the 65% to 70% cash on cash return range. And so when you think about the pieces and when I think about the inflation that’s happened and is about to happen I think about the cost of GMO’s and I think about our pricing power which we believe and everyone who is trying to go out there I need to prove or disprove whether we have pricing power either by surveying customers or by comparing us to competitors just confirms that we have pricing power. I feel like a mid-single digit inflation and we’ll do everything we need to do. And if our food costs ends up being closer to 33% than 32% or so but our margins end up being at or above where are they ever been that would be just a fine result as far as we are concerned. David Tarantino – Robert W. Baird & Co.: Great that’s really helpful. And then I guess on the inflation outlook for next year you mentioned that being pretty tame. I guess with corn prices where they are what are the chances you might see some favorability on the food cost themselves as you move into may be the second part of next year?

Well, what that might affect David it would affect the prices of our meats, if corn continues to be favorable. I don’t know that it would. We are not predicting at least or nothing we are seeing is predicting that cost will go down but if they hold kind of at this level that’ll be great. We buy white corn for our salsas and so that is more expensive already and so we are not saying that that’s going to go down but certainly we would welcome if the feed prices do decline and if that causes our meat prices to relax a little bit, that’ll be welcome. But right now we are seeing more of a tamish environment not a deflationary environment. David Tarantino – Robert W. Baird & Co: Okay, thank you very much.

Thanks David.

All right, thanks everyone. It seems like we lapsed our time. But we thank you for joining us today. And we look forward to speaking with you next quarter.

Thanks everyone.

Thanks everyone.

Thank you. That does conclude our conference. You may now disconnect.