Eric Gonzalez - RBC Capital Markets David Tarantino - Robert W. Baird Co. John Glass - Morgan Stanley Jason West - Deutsche Bank Nicole Miller - Piper Jaffray Andy Barish - Jefferies Keith Siegner - UBS Nick Setyan - Wedbush Securities

Good day, and welcome to the Chipotle Mexican Grill First Quarter 2014 Earnings Conference Call. All participants are now in a 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. Thank you. I would like to turn the conference over to Chipotle’s Director of Investor Relations, Alex Spong. You may begin your conference.

Thanks, Rene. Hello everyone and welcome to our call today. By now you should have access to our earnings announcement released this afternoon for the firth quarter 2014. It may also be found on our website at chipotle.com in 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 restaurant openings, throughput, catering growth, restaurant margins, comp restaurant sales increases, growth in average restaurant volumes, trend in food cost and another expense items, and effective tax rates 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. I would like to remind everyone that we have 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 second quarter, it will begin June 1st and continue through our second quarter release in July. 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 will now turn the call over to Steve.

Thanks Alex. Well, I am extremely pleased with our sales performance during the first quarter. We ended 2013 with nice sales momentum and that momentum strengthened in first quarter as our restaurant teams continue to do a great job of delivering our customers who visited Chipotle during the quarter. Our revenues were $904.2 million for the quarter, an increase of 24.4% driven by an increase in same-store sales of 13.4% and from the opening of 44 new restaurants. This produced diluted earnings per share of $2.64 for the quarter, an increase of 7.8%. What I’m pleased about is that our constant pursuit of creating an extraordinary dining culture along with the best people culture in the restaurant industry is resonating with our customers, and they’re rewarding us with their loyalty. Our food culture continues to focus on finding the very best ingredients with an eye towards sustainability and great taste and preparing them using classic cooking techniques. This allows us to constantly improve our already delicious food. Our unique people culture is centered around hiring top performers who are empowered to achieve high standards and developing them to be the future leaders of the Chipotle. Although our focus and emphasis on these two key areas is not new. We are more confident than ever that building a strong food culture and a strong people culture is helping us change the way people think about and eat fast-food while leading to significantly better business results. During the quarter, we announced plans to continue to rollout Sofritas. This is our delicious vegan tofu offering and we expect to have Sofritas in all of our restaurants by the end of the year. Sofritas is an organic tofu and it’s braised with chilies, chipotle adobo, garlic, cumin and oregano. It’s been very popular with…

Thanks Steve. I am really proud of the results our restaurant teams delivered during the first quarter. While many restaurants and retailers have talked about a tough consumer environment not because of the weather the type of economy our teams have created such a warm and welcoming environment that our customers visited at an accelerated rate during the quarter. This terrific environment our customers discover when they visit Chipotle is the result of the special people culture our managers are creating in our restaurants. It’s a culture that emerges when you hire only terrific people who believe in and are committed to work Chipotle is having who have a desire to learn how to create delicious food made from high quality ingredients and who drive in a culture when they are empower to contribute to their absolute fullest potential including becoming the future leaders of Chipotle. Of course this is the culture that customers discover when they visit our restaurant to restaurants and every one of our managers throughout the country is intently focused on creating this very same restaurateur culture in their own restaurants. Today we have more than 500 restaurateurs including over 90 in field leadership positions but we have more than 1,200 managers who are working hard to become restaurateur soon. In fact every single one of our managers has targeted becoming a restaurateur within the next 12 months most of them sometime during this year. We know this because the plan tool that you’ve heard me talk about during the past two earnings calls identifies a specific plan of action by which each GM will create a restaurateur culture in their restaurant. These are realistic plans created based on themes our field leaders have identified when visiting each restaurant and meeting with each and every crew…

Thanks, Monty. We’re delighted that more and more people are choosing to visit our restaurants every day, our top performing crews and managers continue to provide an exceptional dining experience to our guests by providing great service and serving delicious meals made from premium ingredients. And this has led to our strong sales momentum which accelerated into the first quarter. Our sales increased 24.4% in the quarter to $904.2 million, the sales increase is driven by a very strong sales comp of 13.4% in from new restaurant openings. We’re very happy to report that the 13.4% sales comp represents the highest quarterly comp we’ve experienced in nearly eight years since the second quarter of 2006. Back then our average restaurant volumes were under $1.5 million while this strong comp has pushed our average restaurant volumes above $2.2 million for the first time. The comp was driven primarily by increased customer visits and while weather in the quarter certainly created volatility we believe there was not a net overall negative impact from weather in the quarter. While sales were understandably down during days of extreme winter weather when the weather improved our sales recovered to a higher level than before the extreme weather for a few days, before settling back into a normal sales trend. The comp also benefited from an increase in the average check of about 2% and we benefitted by about 1% from an extra trading day as Easter was in the first quarter of last year. Average check in the quarter was up from last year due to an increase in side orders mostly chips and guac and extra meat and from an increasing catering. Catering continues to represent just about 1% of sales and the average catering order is nearly $300 so it has an obvious…

Thank you. (Operator Instructions) And we’ll take our first question from David Palmer with RBC. Please go ahead.

Hi, this is actually Eric Gonzalez in for David Palmer. Congrats on the strong traffic growth in the quarter. We were wondering if you could focus on marketing for a second. You recently mentioned how you were changing your local store marketing efforts and maybe if you could talk about the changes you made and maybe assess what has worked well for you? And then on the digital side, do you expect to increase usage of digital marketing in the near term? Is that something that could be a 2015 event? And then maybe what you've learned on the digital side so far?

So in terms of the local store marketing, we revamped the way we deploy the team. We now have 36 marketing specialist across the country. They each create detailed plans based on the market experiences and the needs of the restaurants. Most importantly though I think most impact has been derived from the marketing specialists spending time with restaurant managers and the restaurant teams developing ways that they can customize programs and reach out directly to individual customers, local businesses, schools, sports teams, hospitals, community events like races, foot races, bicycle races things like this. So there are a number of customized programs that they developed, and then we usually developed custom currency that we can distribute during these events. So it’s not a one size fits all, in fact it’s for a company the size of Chipotle it’s very unique and in that super-super nimble and able to reach out on folks on a very individualized basis which I think has really gone to creating a very, very strong bond and trust with our customers. It reminds me of the way I used to reach out to the local community when I ran just one restaurant. And I think to be able to have 1500 restaurants in United States that act like individual modern hops where the restaurant manager and restaurateur and his or her team can be a part of that community and that fabric just helps to strengthen the specialness of Chipotle. So on digital, there is really a lot of elements on digital and so I’ll try and touch on all of them. First of all, we’ve always done some marketing on a number of digital outlets. We’re active on Twitter, we’re active on Facebook. We provide digital offers as well. So we’ll continue to do…

Thank you. We’ll take our next question from David Tarantino with Robert W. Baird.

Good afternoon, and congratulations on the sales momentum here same. May be...

It’s still morning David.

I wanted to ask about may be the cost outlook and Jack I think you mentioned that you’re continuing the effort put pressure on commodity prices you’ve decided to take a price increase. Could you frame up where you think the cost ratio might be heading without that price increase in the second half? I thought you said over 36%. But maybe if you can provide some more granularity on how you think this plays out so that we can model it more precisely.

Yes we think David that April alone even though we’re not done with the month but just based on the commodity costs we’ve seen so far with avocados are up because of buying from California stake is up for the reasons I mentioned and that’s not Chipotle only thing beef prices in U.S. in general are at all-time highs right now. And so those have really spiked recently. And then based on expected price increases in cheese we think April will be right at about 36% we think we could push in the second and third quarters, pushed half of that hopefully not too far pas that. We’re hopeful by the fourth quarter that will settle a little bit the avocado pricing pressure we’re seeing is more of a cyclical based on buying from California and based on this year in general, supply is going to be a little bit low you’ve heard us talk in the past that avocado supply tends to be in every other year thing that when you have one good year the next year seem to be a little bit light and we’re in kind of that light year this year. So we’re hopeful that the fourth quarter will settle a bit and be something under 36% I don’t think I’d do a very good job of predicting it precisely but I would guess it would be in may be 35% to 36% range before considering the price increase.

Okay, thank you. And then as I think about pricing so you haven’t raised prices in three years and I just want to kind of come back to your long term philosophy on raising prices and what you implement this price increase you could continue to see pressure it seems like on some of these item. So I’m just kind of curious to know how quickly you’re willing to come back to the market on pricing if you needed it in 2015 or ’16 or is this going to be more kind of an every couple of years type of strategy?

Well I would say neither David and what I mean by that is we don’t focus very much on the timing and so we don’t kind of think today let’s raise prices and then raising again or let’s raise prices now and not raise them again for two or three years. What we think more about is making sure that we earn pricing power. And if we focus on that, if we focus on creating a wonderful restaurant experience and cooking and serving delicious food that we have the permission to raise prices. And if we know as we do the job with that, then picking the timing of it is less relevant it’s just not that important. And generally we’ve been patient in terms of raising prices we have this luxury of being patient. Now what we seen so far and looking at market by market pricing we believe we’ve got a lot of pricing power, we feel very comfortable that if we raise prices somewhere in that mid-single digit range we still got room. So we’re not going to spend all of the pricing power we built up over time we still have some in the bank. And so if we need to come back at some point in the future let’s say next year we would have the ability to do that and then we will go through the normal process that we go through considering inflation, considering transactions trends, considering remaining accessible because as you know we want to remain accessible to our customers so that everyone can enjoy to dine at Chipotle. We’ll go through that same consideration but the thing that we’re most pleased about is that we have built up quite a bit of information to raise prices and yet we won’t cash in on all that pricing ability, right now. So we’ll still have some in the back.

Thank you. We’ll take our next question from John Glass with Morgan Stanley.

I was probably trying to find fault in great quarters. But in this case there were I think a number of cost issues and they didn’t just relate to the foods I just want to explore those. First, Jack when you look at the labor ratio your labor dollars per store grew at the highest rate it’s grown in several years, even in other quarters we’ve had very strong transaction driven comp. So was there something unique in -- did we run out of initiatives this quarter, so you’re seeing labor inflation, was there some inefficiencies and sort of what happened in labor this quarter?

A couple of things John, one last year we were benefiting during most of the quarters from a reduced over time compared to the year before and so that ran out that ran of course. And so we’re not getting any kind of benefit from doing a better job at managing over time. We had parts of the country mostly in the Northeast that had excessive overtime cost in 2012 and so as we compare it in 2013 and doing a better job in managing over time our labor leverage was better to those quarters, that kind of ran its course. In terms of inefficiencies, we probably have about 20 or 30 basis points or so, in ideal theoretical calculation of what’s possible of additional labor leverage. And the reason that didn’t happen is our teams have been focused on doing a better job at staffing the restaurants. And so if their sales volumes suggest they should have 28 people on their team instead of 24, we’re now doing a better job of getting close to that 28 and are giving down the hours. They are staffing for the four pillars and so we’re doing a better job of having the right number of people on the roster and both at the crew level and at the manager level. So we have a deeper bench of top performers that we now are confident can be promoted up to kitchen manager, service manager, et cetera. And so our teams are better staffed are scheduled and we’re scheduling a full team, especially during our peak hours. And so we’re getting better results and so I will trade that 20 or 30 basis points, that’s theoretical for better throughput for a deeper bench and a fuller staff of crew and managers. It’s possible over time but we’re not going to rush into it, it’s possible over time, we might be able to capture that 20 or 30 basis points. But I would consider that to be a relatively small inefficiency or investment to get the operating results that we’ve seen.

That’s helpful. And then on the G&A line I think even excluding the stock based comp and the litigation, G&A dollars grew and rough calculation was like still up 30%, no matter if that’s right or not but is there anything unusual of G&A other than those two items that would have grown faster than it will grow through rest of this year?

No I mean we did have, our bonus is up a little bit John probably because the quarter was good, it was up a little bit as a true up from last year’s bonuses a couple of small things here and there. I think if you take out the non-cash stock comp and take out for the full year I am taking about now. If you take out the non-cash stock comp take out the manager conference which will cost $8 million this later year, and you look at it year-over-year. I think we’ll have some slight leverage in our G&A. so I think our spending is in pretty good shape. We have added a number of people to our ranks in the past year to support our growth. But I would say there is nothing out of the ordinary underneath our G&A, it’s still leveraging slightly and overtime, hopefully we’ll have the opportunity to leverage even more as we kind of grow into the recent headcount additions.

And then just I guess the, does the pricing take care of all this in other words operating margin expand in the back half given food inflation and given all the other things you just talked about enough to do that?

It depends on what happens in the back half of the year but based on our expectations I will expect our margins will expand.

And we’ll take our next question from Jason West with Deutsche Bank.

Jack I didn’t quite hear if you said any sort of update on where things are running in the second quarter, short-term but just what the comparison and 200 basis points on the trading day, just any help you can offer on kind of how’s the second quarter so far?

In April so far I would say that the underlying trends are comparable to what we saw in the first quarter. And so I think if you take into account that we’re losing a couple of hundred basis points compared to the first quarter in terms of trading day and it’s a tougher comparison. But it you adjust for those, the underlying kind of transactions that I am seeing and the underlying sales that we’re seeing are comparable to the first quarter.

Great, and then just when you enter the pricing timing, can you run through that just one more time in terms of when the pricing will be fully rolled out to the system the kind of mid second quarter and things like that.

I would expect it will be fully rolled out to all of our markets by early in the third quarter, I mean I suppose it’s possible we might be able to accelerate and get it done by the end of the second. But I would say by early into third quarter we’ll have new menu boards with new prices in all our markets.

Okay, great. And then just one other quick one. Monty, you talked about the throughput improvements at peak periods. Can you remind us what your average peak lunch transactions are and peak dinner transactions just so we have kind of a foundation there?

Yes, we talk about specific what those numbers are, but they’re sort of in that between 110 and 120 range during the Friday’s at peak lunch and a little lower than that when you look at Monday through Friday. And that’s for the first quarter we expect that in the second quarter and probably third quarters as well. We will see those increase hopefully even substantially because the first quarter is our slowest time of year in terms of what we would expect in terms of throughput and yet we’ve derived these wonderful throughput improvement where even our peak lunch and dinner hours nearly kept up with all day comp numbers in terms of being able to put more people through at those peak hours. So it’s really difficult in fact in terms of the absolute number we put through. The number of people per hour the day we have bigger games during lunch and dinner than any other time of the day. We have seven more people they’ll be put to the line on average per restaurant during those times of the day when our lines are longest. So we’re very-very proud of our field teams for accomplishing that, but we also know that our field - and our field teams know that now is really when that game begins because now is when our peak season is descending upon us when will be busier and we’ll have an opportunity to really-really hit the ball out of the park on these throughput numbers as we execute the four pillars hopefully as flawlessly as we ever have and thereby giving much-much better customer experience to everybody. So we’re proud of the absolute numbers of I think particularly in light of the fact that the first quarter is not one of the places where we usually set records and we did.

And we’ll take our next question from Nicole Miller with Piper Jaffray. Please go ahead.

Awesome quarter. When you think about catering what kind of customer feedback are you getting? And I’m specifically wondering if you would consider delivery or test it.

Thanks Nicole, and with catering most of our customers comments -- a lot of customers comments are coming in that are just very delighted that we have it in the first place. It’s something less than 1% of comments are still frustrated where they’re being late or things not being put together correctly. And I think that we’re still working out some bugs in that regard but we’re proud generally how our restaurants teams are accomplishing catering. In terms of delivery, it’s not something we’re particularly to get involved with at this point throughout the country with the possible exception as Manhattan, but with really catering right now and our customers are pleased to be built the comment and carry these very - and we package things in a very easy way where our customers can carry even a fairly large catering order out and taken home with them. And I think that while some people would like us to deliver, our fear would be that putting in place at delivery model we change unit economic of the catering program and make is more difficult for us to price it competitively. And I think if you put delivery in, I mean, let’s say one out of ten people would like delivery right now, I think that if you offer delivery, six out of ten might take it. And so I think that something like that and we’re just making these numbers up basically we don’t want put delivery in place and end up costing the ability to be really competitive and to deliver this food to folks at this terrific price in this really fun way. We don’t want to drive the prices up by breaking the unit economics of it. So I don’t think you will see us doing wholesale delivery programming in catering for foreseeable future.

Very helpful. And I also forgot to ask, are most of those catering orders coming in online?

Well, it is a combination of online and also through a call service that we have in place.

Right. Does it -- is it weighted towards one or the other?

It comes to a call center at the third party down there and then they decide -- they pass it onto the restaurant and make sure that it is taken care.

Oh, okay. I just didn't know if there was online.

Catering per se doesn’t come in, we have online orders for multiple orders and Jack is telling me right now it’s coming. So in terms of being able to do online orders for catering that’s still something we’re working on.

And we’ll take our next question from Andy Barish with Jefferies. Please go ahead.

A couple of things just wondering your impressions on sort of has the value gap for Chipotle kind of widened, meaning the time you’ve taken between pricing increases has shown up in customers’ perceived value being a lot higher? And then secondly, just on the throughput, again sort of more theoretical, but how are you balancing speed versus kind of the hospitality side of things in the restaurants if you could?

All that’s to the throughput question and pass on to Jack to talk about the pricing value proposition, but with regard to throughput I think the notion of fast throughput somewhat degrading the customer experience is the wrong -- we look at that as being the wrong way to look at it in fact the way we work on throughput it basically to understand that those things that that best in terms of hospitality things like clear communication, great eye contact, friendliness along the line, efficiency along the line, sense of urgency. All of those things are the things that compose a great customer experience at Chipotle. And that’s why we’re so insisting on having top performers in that places on the line and all that. However, not only are those things, the things that generate the best possible customer experience, those same things happened to be the things that generate the fastest throughput. So, I would literally tell you that as our throughput gets faster you can count on our hospitality not only not the grading but actually getting better us having better and better communications and more and more prepared, so that our actions on the line look not hurry, but fluid. And we’re not operating with the sense of panic but rather we have a team of top performers who look very, very comfortable and are very comfortable serving customers. If you look at our fastest throughput in our restaurants in the whole country, those restaurants tend to be the ones that actually have the best customer service. So, if you were to go survey everyone in our lines, they would all want faster throughput. And while occasionally we do get a comment from someone who is perhaps very new to Chipotle says I felt rushed through the line. When we look into those comments and contact those customers it’s almost really never that they were rushed it’s because we did something wrong, we didn’t listen to them carefully or didn’t give them what they wanted, not because of speed, so faster food equals great customer service through and through.

And Andy on the consumer view of the price value, when we dig into why consumers think that Chipotle is a good value sure price is the piece of it but the bigger piece of it is the experience, it’s [indiscernible] who they trust where the ingredients are coming from, they can see the open kitchen and so they feel good about seeing their food made in front of them. And so, and they love the taste of it, of the food. We get lots of comments about how friendly our crews are, how hospitable our crew are and so most of the value comes from the experience. Our pricing certainly is affordable and in fact when you compare our pricing to others in the fast casual (Ph) we’re often cheaper and we should be able to be more expensive because we spend more on our ingredient for sure. But our customers don’t place a big part of the value that they -- value scores that they gave us which are very, very high. A smaller part of that is attributed to price alone which is different than what customers of other restaurants might say. So we feel good that if we focus on the things that we focus on, great experience, great food, great teams they’re creating a wonderful dining experience that our customers will continue to see Chipotle as a great value and they’ll continue to be willing to spend a little bit more money and really it’s just a little bit more money for this wonderful dining experience that we offer them.

And we’ll take our next question from Keith Siegner with UBS. Please go ahead.

Thank you, and congratulations for the restaurateur that are the ones out there managing that transaction growth on a day to day basis this is very impressive. Monty thank you very much for all the color around the four pillars how this is helping increase serve independent throughput. Asides the four pillars are there other opportunities to grow the transaction how is the users say the online order ahead is this helping contribute to the traffic growth, are there other alternatives aside from just the four pillars it could be an opportunity to keep that transaction growth is that growing? Thanks.

Yes, it’s a great question. I mean we looked at it in different ways over the years. I think when we first really started to put our eyes on throughput in 2006 we were a little I would say a little bit gadget focused. We were concerned about having a second cash register and how that would increase throughput and if you look back corner you will see a comment from me seven or eight years ago stating that the second cash register can increase our throughput 40% and in fact that was true at the time. But then what we started to discover is there were places where we’d add the second register and throughput would go up 40% and we removed the second registered and throughput would stay the same although be the higher. And so we knew there was something more to it. Then later we added cash -- change machines that would automatically dispense the change to the customer and that did increased too further bit because it took a second or two or three of the job that our cashier had to do and so that was an effective thing. And then we try to handheld ordering system which is still in operation in few restaurants. But what we kept finding is no matter how much of the sort gimmicks we added or how much we used, tried to use technology to increase our throughput nothing could compete with the restaurants that had I guess I’ll say two things. One is having a restaurant tour team, having a team of all top performers who are empowered to achieve high standards. To make a long story short, great teams are just faster and better. But another thing was the teams, the best of the teams that…

Thank you. And we’ll take our next question from Nick Setyan with Wedbush Securities.

I want to ask a question on the minimum wage specially in California, I mean ex pricing how we should think about that impacting the labor line going forward and there is another one coming next year again plus we have the healthcare headwinds kicking in little bit more. Maybe you can just kind of remind us what the impact we should expect?

Yeah the California minimum wage this summer is going to increase to $9 and it’s actually not next year it’s two years from now in 2016 we’ll increase again to I believe to $10. We have already being paying, we’ve always been above minimum wage, we have been hiring in California between $8 and $9 and starting at the first this year, we’ve been hiring at $9. So we’ve already been kind of early adopting this first, until there is very little effect I would call it at a companywide level negligible effect. There will be a bigger effect when the minimum wage increased to $10 in California in a couple of years, but even that is in the range of few million dollars not tens of million dollars. So we can certainly absorb that. And I am sorry, Nick what was the second part of your question?

It’s the healthcare impact, if you guys could remind us what that is expected?

So the healthcare impact, that will depend -- we are planning on offering healthcare to all of our hourly crew that meets requirements that work to 30 hours or more per week, which most of our crew more than half of our crew do work more than 30 hours, we’re planning on offering an insurance plan, a credible insurance plan to those folks. What we don’t know is how many will accept it. Our estimates is that this will cost somewhere around or below 1% of sales. But we won’t know that for sure until we offer insurance and then we can see how many people adopt it versus how many people decide not to take the insurance.

Got it. And I am just shifting a little bit on the unit growth side. Are you guys seeing more opportunities with some of the construction increasing, I know in the past that’s been a little bit of the limit on how fast you can add new units, but does seem like it’s becoming a little bit more of the tail wind. So can you potentially see the unit growth or the additions at least increase little bit going forward?

I mean right now what gives us great optimism is the fact that impact from new restaurants is very, very low; it’s below 1% and has been below 1% every year for quite some time. And so in terms of the pipeline of new restaurants that we’re able to find and build we have a significant new pipeline and believe we’ll be able to level our restaurant openings throughout the rest of this year, and which will put us well on Phase 2 to hit the numbers that we’ve suggested that we’ll hit in terms of new store openings. So we feel very, very good about that. Now in terms of being able to accelerate that number, there is always a possibility to accelerate that number and what we always do is sort of balance the quality the real estate we’re able to find with our ability to have great people to run those restaurants and we’re feeling as I talked about during my opening comments we’re feeling very, very good about the pipeline of leaders that are moving up to the ranks. And the probabilities having even faster pace of restaurant development due in large parts of use of the plan tool and our use of that device to help people make sure they have plans in place. And so the people pipeline we feel is really strong, the real estate pipeline is very strong. I think you’ll see us continue to be careful and measured in terms of how we add restaurants, so we continue to add these joyful new store openings that deliver great customer experiences.

Thank you. And we do have time for one final question. We’ll take our last question from Matthew Difrisco with Buckingham Research. Please go ahead.

Hi this is Katherine in for Matt here and thanks for taking my question. I just have a question on the G&A line, I think you said it will be up 50 to 60 bps but you’re keeping the 90 million non-cash stock based comp. So since you have higher in 1Q, does it mean it will be evenly spread out meaning lighter in the reaming quarter. And then also can you talk about the litigation cost, like what’s in it? And then should we consider as a one-time nature?

So on the non-cash stock comp, and it’s actually 98 million in total for the year, 28 million hit in the first quarter, 62 million will hit in the first half of the year that means 34 million will hit in the second quarter and that will level up to around 20 million in third quarter and around 50 million in the fourth quarter. And so by the time we get to the fourth quarter the non-cash stock comp is close to half of what it was in the first quarter, so that’s why G&A in the first quarter is quite high, but it will level off over time and normalize over time and keep in mind that’s all non-cash to journal entry you know those amounts are never paid and so but it spread unevenly throughout the year and then your second question I’m sorry was…

It’s on the allocation.

We’re not going to comment on specifically what that was about, we did have more activity during the quarter and so we don’t feel like the activity that happened in the quarter will be something that will occur, litigation is hard to predict perfectly but we do think that the quarter was a little bit unusually high and we would hope that it would settle back down to normal charges for the rest of the year.

Okay, if I can just have one more follow up, can you talk about the volume that you’re seeing in ShopHouse and Pizzeria Locale and also the international.

When I comment specifically you know, the volumes there’s lots of - actually it’s really important about Pizzeria Locale above ShopHouse and Chipotle international and the volumes is just one of them. What I can tell you is that the volumes for all of our proceeds they’re behaving similarly in general to how we saw Chipotle going into early markets back when Chipotle was kind of unknown, you know back in the early 2000 or so, and so there’s a discovery process and so restaurants don’t open up at the same levels the Chipotle in US does but as the discovery process happened we’re seeing more and more people come in, we’re seeing the traffic increase and we’re seeing patterns that are very similar to what we saw with Chipotle in the early days and we find that to be very encouraging and so, but we’re not disclosing volumes, that’s just one very small piece, one little sound bite of everything that we’re looking at in terms of the quality of the food, the quality of the people, the quality of the customer experience. So we’re not talking about specific volumes.

All right thanks everyone for joining, and we’ve exceeded our time for the call but we thank for joining us and we look forward to speaking with you next quarter. Thanks everyone.

That does conclude today’s conference. We thank you for your participation.