Chipotle, Mcdonald's Complete Separation

Friday, October 13, 2006

With the completion of its tax-free swap of class B common stock in Chipotle Mexican Grill, Inc.

(NYSE:CMG), for its own common stock, McDonald's Corp. has fully divested its investment in Chipotle.

McDonald's initially invested in Chipotle in 1998 when the Denver-based burrito restaurant had about 15 units, making Chipotle the first concept other than its own McDonald's ever invested in.

McDonald's grew to become Chipotle's largest investor in 2001.

McDonald's investment helped Chipotle build a national brand with more than 500 restaurants.

"McDonald's original investment represented a strong vote of confidence in what Chipotle was doing at the time," said Steve Ells, Founder, Chairman and CEO of Chipotle, who sought McDonald's as an investor to help finance the growth of his small burrito chain. "They have been a terrific partner for us, providing needed capital, shared access to other resources as needed, and also the autonomy to pursue our vision." Chipotle's vision -- to change the way Americans think about and eat fast-food -- is most visible through a core value it calls Food with Integrity (its effort to source the very best raw ingredients from animals and produce which are raised with respect for the farmers, the environment, and the animals).

As part of this vision, Chipotle became the first fast casual chain to offer naturally raised pork from Niman Ranch. This naturally raised pork comes from pigs that are fed a pure vegetarian diet, never given antibiotics or added hormones, and raised on open pastures or in deeply bedded barns where they can engage in their instinctive behaviors. Today, all of the pork Chipotle serves is naturally raised, coming from a small group of suppliers that includes Niman Ranch and other like-minded farmers.

In addition to pork, Chipotle also sources naturally raised chicken and beef in many of its markets around the country. Today, more than half of Chipotle's chicken is naturally raised, as is a third of its beef. In all, Chipotle is now serving more naturally raised meat than any other restaurant in the country.

But Chipotle's efforts in this regard don't stop there. It is also investigating and sourcing a wider array of sustainably grown and/or organic ingredients. For example, this year, about 25% of the beans Chipotle buys will be organic, up from 20% last year. The company expects this quantity to keep increasing as additional supply becomes available.

According to CIBC World Markets, Chipotle is leading a trend that emphasizes natural and organic foods. CIBC cites Chipotle's focus on Food with Integrity as a reason for the brand's success, particularly in a marketplace in which organic and natural foods are a $25-$30 billion industry.

"The focus on our vision is as sharp as it has ever been and we remain disciplined in pursuing each new step in this journey," said Ells. "We're proud that we've been able to build a supply chain for these superior ingredients, but we recognize that providing Food with Integrity is a journey, a process of constantly looking to make better choices about the food we serve, and we're committed to doing just that." About Chipotle Chipotle Mexican Grill (NYSE:CMG) offers a focused menu of burritos, tacos, burrito bols (a burrito without the tortilla) and salads made from fresh, high-quality raw ingredients, prepared using classic cooking methods and served in a distinctive atmosphere.

Through our vision of Food with Integrity, Chipotle is seeking better food not only from a variety of fresh ingredients, but ingredients that are sustainably grown and naturally raised with respect for the animals, the land, and the farmers who produce the food. Chipotle opened its first restaurant in 1993 and operates more than 530 restaurants today. For more information, visit

For More Infromation Please contact:
Chris Arnold
Phone: 303-222-5912

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Chipotle Mexican Grill, Inc.
1543 Wazee Street #200
Denver, Colorado

Phone: (303) 222-2528
Fax: (303) 390-0650

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