SHAKE SHACK INC., 10-Q filed on 5/16/2016
Quarterly Report
Document and Entity Information Document
3 Months Ended
Mar. 30, 2016
May 4, 2016
Class A Common Stock
May 4, 2016
Class B Common Stock
Document Information [Line Items]
 
 
 
Document type
10-Q 
 
 
Amendment flag
false 
 
 
Document period end date
Mar. 30, 2016 
 
 
Document fiscal year focus
2016 
 
 
Document fiscal period focus
Q1 
 
 
Entity registrant name
Shake Shack Inc. 
 
 
Entity central index key
0001620533 
 
 
Current fiscal year end date
--12-28 
 
 
Entity filer category
Non-accelerated Filer 
 
 
Entity current reporting status
Yes 
 
 
Entity common stock, shares outstanding (in shares)
 
22,313,896 
13,969,794 
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (USD $)
In Thousands, unless otherwise specified
Mar. 30, 2016
Dec. 30, 2015
Current assets:
 
 
Cash and cash equivalents
$ 65,855 
$ 70,849 
Accounts receivable
3,337 
4,217 
Inventories
621 
543 
Prepaid expenses and other current assets
3,600 
3,325 
Total current assets
73,413 
78,934 
Property and equipment, net
102,279 
93,041 
Deferred income taxes, net
241,466 
201,957 
Other assets
5,352 
5,615 
TOTAL ASSETS
422,510 
379,547 
Current liabilities:
 
 
Accounts payable
6,035 
6,786 
Accrued expenses
5,442 
6,801 
Accrued wages and related liabilities
3,718 
5,804 
Other current liabilities
5,026 
4,614 
Total current liabilities
20,221 
24,005 
Note payable
313 
313 
Deferred rent
24,381 
22,927 
Liabilities under tax receivable agreement, net of current portion
205,851 
170,933 
Other long-term liabilities
4,326 
4,350 
Total liabilities
255,092 
222,528 
Commitments and contingencies
   
   
Stockholders' equity:
 
 
Preferred stock, no par value—10,000,000 shares authorized; none issued and outstanding as of March 30, 2016 and December 30, 2015.
0 
0 
Additional paid-in capital
107,590 
96,311 
Retained earnings
5,735 
4,273 
Accumulated other comprehensive loss
(6)
(5)
Total stockholders' equity attributable to Shake Shack Inc.
113,355 
100,615 
Non-controlling interests
54,063 
56,404 
Total equity
167,418 
157,019 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
422,510 
379,547 
Class A Common Stock
 
 
Stockholders' equity:
 
 
Common stock
22 
20 
Class B Common Stock
 
 
Stockholders' equity:
 
 
Common stock
$ 14 
$ 16 
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) (USD $)
Mar. 30, 2016
Dec. 30, 2015
Preferred Stock, no par value (in dollars per share)
$ 0 
$ 0 
Preferred stock, shares authorized (in shares)
10,000,000 
10,000,000 
Preferred stock, shares issued (in shares)
0 
0 
Preferred stock, shares outstanding (in shares)
0 
0 
Class A Common Stock
 
 
Common stock par value (in dollars per share)
$ 0.001 
$ 0.001 
Common stock, shares authorized (in shares)
200,000,000 
200,000,000 
Common stock, shares, issued (in shares)
21,700,184 
19,789,259 
Common stock, shares, outstanding (in shares)
21,700,184 
19,789,259 
Class B Common Stock
 
 
Common stock par value (in dollars per share)
$ 0.001 
$ 0.001 
Common stock, shares authorized (in shares)
35,000,000 
35,000,000 
Common stock, shares, issued (in shares)
14,582,886 
16,460,741 
Common stock, shares, outstanding (in shares)
14,582,886 
16,460,741 
CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS) (UNAUDITED) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 30, 2016
Apr. 1, 2015
Income Statement [Abstract]
 
 
Shack sales
$ 52,153 
$ 36,047 
Licensing revenue
2,012 
1,761 
TOTAL REVENUE
54,165 
37,808 
Shack-level operating expenses:
 
 
Food and paper costs
15,032 
11,004 
Labor and related expenses
13,162 
9,101 
Other operating expenses
4,919 
3,480 
Occupancy and related expenses
4,323 
3,183 
General and administrative expenses
6,884 
18,385 
Depreciation expense
3,106 
2,191 
Pre-opening costs
2,025 
1,413 
TOTAL EXPENSES
49,451 
48,757 
OPERATING INCOME (LOSS)
4,714 
(10,949)
Interest expense, net
64 
78 
INCOME (LOSS) BEFORE INCOME TAXES
4,650 
(11,027)
Income tax expense
1,299 
233 
NET INCOME (LOSS)
3,351 
(11,260)
Less: net income attributable to non-controlling interests
1,889 
1,408 
NET INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.
$ 1,462 
$ (12,668)
Earnings (loss) per share of Class A common stock:
 
 
Basic (in dollars per share)
$ 0.07 
$ (1.06)
Diluted (in dollars per share)
$ 0.07 
$ (1.06)
Weighted-average shares of Class A common stock outstanding
 
 
Basic (in shares)
20,353 
11,953 
Diluted (in shares)
20,812 
11,953 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 30, 2016
Apr. 1, 2015
Statement of Comprehensive Income [Abstract]
 
 
Net income (loss)
$ 3,351 
$ (11,260)
Other comprehensive loss:
 
 
Unrealized holding losses on available-for-sale securities
(2)
0 
Income tax benefit
0 
0 
OTHER COMPREHENSIVE LOSS, NET OF TAX
(2)
0 
COMPREHENSIVE INCOME (LOSS)
3,349 
(11,260)
Less: comprehensive income attributable to non-controlling interests
1,888 
1,408 
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.
$ 1,461 
$ (12,668)
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED (USD $)
Total
USD ($)
Class A Common Stock
Class B Common Stock
Common stock
Class A Common Stock
USD ($)
Common stock
Class B Common Stock
USD ($)
Additional Paid-In Capital
USD ($)
Retained Earnings
USD ($)
AOCI Attributable to Parent
USD ($)
Non- Controlling Interest
USD ($)
Beginning balance at Dec. 30, 2015
$ 157,019,000 
 
 
$ 20,000 
$ 16,000 
$ 96,311,000 
$ 4,273,000 
$ (5,000)
$ 56,404,000 
Beginning balance (shares) at Dec. 30, 2015
 
19,789,259 
16,460,741 
19,789,259 
16,460,741 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
Net income (loss)
3,351,000 
 
 
 
 
 
1,462,000 
 
1,889,000 
Other comprehensive loss:
 
 
 
 
 
 
 
 
 
Unrealized holding losses on available-for-sale securities
(2,000)
 
 
 
 
 
 
(1,000)
(1,000)
Equity-based compensation
1,060,000 
 
 
 
 
1,060,000 
 
 
   
Stock option exercises (in shares)
 
 
 
33,070 
 
 
 
 
 
Stock option exercises
628,000 
 
 
 
 
216,000 
 
 
412,000 
Income tax effect of stock compensation plans
28,000 
 
 
 
 
27,000 
 
 
1,000 
Redemption of LLC Interests (in shares)
 
 
 
1,877,855 
(1,877,855)
 
 
 
 
Redemption of LLC Interests
0 
 
 
2,000 
(2,000)
4,642,000 
 
 
(4,642,000)
Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis
5,334,000 
 
 
 
 
5,334,000 
 
 
 
Ending balance at Mar. 30, 2016
$ 167,418,000 
 
 
$ 22,000 
$ 14,000 
$ 107,590,000 
$ 5,735,000 
$ (6,000)
$ 54,063,000 
Ending balance (shares) at Mar. 30, 2016
 
21,700,184 
14,582,886 
21,700,184 
14,582,886 
 
 
 
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 30, 2016
Apr. 1, 2015
OPERATING ACTIVITIES
 
 
Net income (loss) (including amounts attributable to non-controlling interests)
$ 3,351 
$ (11,260)
Adjustments to reconcile net income (loss) to net cash provided by operating activities
 
 
Depreciation expense
3,106 
2,191 
Equity-based compensation
1,030 
13,159 
Deferred income taxes
3 
0 
Non-cash interest expense
70 
66 
Excess tax benefits on equity-based compensation
(28)
0 
Changes in operating assets and liabilities:
 
 
Accounts receivable
1,019 
436 
Inventories
(78)
125 
Prepaid expenses and other current assets
345 
(599)
Other assets
(234)
1,954 
Accounts payable
561 
(255)
Accrued expenses
(89)
(2,350)
Accrued wages and related liabilities
(2,086)
173 
Other current liabilities
202 
341 
Deferred rent
1,354 
1,397 
Other long-term liabilities
(48)
(202)
NET CASH PROVIDED BY OPERATING ACTIVITIES
8,478 
5,176 
INVESTING ACTIVITIES
 
 
Purchases of property and equipment
(14,128)
(8,558)
NET CASH USED IN INVESTING ACTIVITIES
(14,128)
(8,558)
FINANCING ACTIVITIES
 
 
Proceeds from revolving credit facility
0 
4,000 
Payments on revolving credit facility
0 
(36,000)
Deferred financing costs
0 
(92)
Proceeds from issuance of Class A common stock sold in initial public offering, net of underwriting discounts, commissions and offering costs
0 
109,362 
Proceeds from issuance of Class B common stock
0 
30 
Member distributions
0 
(11,125)
Proceeds from stock option exercises
628 
0 
Employee withholding taxes related to net settled equity awards
0 
(4,636)
Excess tax benefits from equity-based compensation
28 
0 
NET CASH PROVIDED BY FINANCING ACTIVITIES
656 
61,539 
INCREASE (DECREASE) IN CASH
(4,994)
58,157 
CASH AT BEGINNING OF PERIOD
70,849 
2,677 
CASH AT END OF PERIOD
$ 65,855 
$ 60,834 
NATURE OF OPERATIONS
NATURE OF OPERATIONS
NATURE OF OPERATIONS
 
Shake Shack Inc. ("we," "us," "our," "Shake Shack" and the "Company") was formed on September 23, 2014 as a Delaware corporation for the purpose of facilitating an initial public offering and other related transactions in order to carry on the business of SSE Holdings, LLC and its subsidiaries ("SSE Holdings"). On February 4, 2015, we completed an initial public offering ("IPO") of 5,750,000 shares of our Class A common stock at a public offering price of $21.00 per share. We used the net proceeds from the IPO to purchase newly-issued membership interests from SSE Holdings ("LLC Interests"). Following the organizational transactions completed in connection with the IPO, we became the sole managing member of SSE Holdings. As sole managing member, we operate and control all of the business and affairs of SSE Holdings and, as a result, consolidate the financial results of SSE Holdings. We report a non-controlling interest representing the economic interest in SSE Holdings held by the other members of SSE Holdings. As of March 30, 2016 we owned 59.8% of SSE Holdings. Unless the context otherwise requires, "we," "us," "our," "Shake Shack," the "Company," and other similar references, refer to Shake Shack Inc. and, unless otherwise stated, all of its subsidiaries, including SSE Holdings, LLC, which we refer to as "SSE Holdings."
We operate and license Shake Shack restaurants ("Shacks"), which serve hamburgers, hot dogs, crinkle-cut fries, shakes, frozen custard, beer, wine and more. As of March 30, 2016, there were 88 Shacks in operation, system-wide, of which 47 were domestic company-operated Shacks, five were domestic licensed Shacks and 36 were international licensed Shacks.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements include the accounts of Shake Shack Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and on a basis consistent in all material respects with the accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 30, 2015 ("2015 Form 10-K"). In our opinion, all adjustments, which are normal and recurring in nature, necessary for a fair presentation of our financial position and results of operation have been included. Certain reclassifications have been made to prior period amounts to conform to the current year presentation. Operating results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year.
The accompanying Condensed Consolidated Balance Sheet as of December 30, 2015 has been derived from the audited financial statements at that date but does not include all of the disclosures required by GAAP. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in our 2015 Form 10-K.
In February 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2015-02, Amendments to the Consolidation Analysis ("ASU 2015-02"). ASU 2015-02 amended the existing guidance to, among other things, modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities, and eliminate the presumption that a general partner should consolidate a limited partnership. We adopted ASU 2015-02 on December 31, 2015. Prior to the adoption of ASU 2015-02, we consolidated SSE Holdings as a voting interest entity. Pursuant to the provisions of ASU 2015-02, SSE Holdings is now considered a VIE. Shake Shack Inc. is the primary beneficiary as we have the majority economic interest in SSE Holdings and, as the sole managing member, have decision making authority that significantly affects the economic performance of the entity, while the limited partners have no substantive kick-out or participating rights. As a result, we will continue to consolidate SSE Holdings. The assets and liabilities of SSE Holdings represent substantially all of our consolidated assets and liabilities with the exception of certain deferred taxes and liabilities under the Tax Receivable Agreement. As of March 30, 2016 and December 30, 2015, the net assets of SSE Holdings were $134,524 and $124,214, respectively. The assets of SSE Holdings are subject to certain restrictions in SSE Holdings' revolving credit agreements. See Note 7 for more information.
Fiscal Year
We operate on a 52/53 week fiscal year ending on the last Wednesday in December. Fiscal 2016 contains 52 weeks and ends on December 28, 2016. Fiscal 2015 contained 52 weeks and ended on December 30, 2015. Unless otherwise stated, references to years in this report relate to fiscal years.
Use of Estimates
The preparation of these condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of sales and expenses during the reporting period. Actual results could differ from those estimates.
Recently Adopted Accounting Pronouncements       
In April 2015, the FASB issued Accounting Standards Update No. 2015-05, Customers' Accounting for Fees Paid in a Cloud Computing Arrangement ("ASU 2015-05"). ASU 2015-05 provides guidance in evaluating whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the software license element of the arrangement should be accounted for as an acquisition of a software license. If the arrangement does not contain a software license, it should be accounted for as a service contract. We adopted ASU 2015-05 on December 31, 2015 and elected to adopt the standard on a prospective basis. The adoption of ASU 2015-05 did not have a material impact on our consolidated financial statements.
In August 2015, the FASB issued Accounting Standards Update No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements ("ASU 2015-15"), which clarifies the guidance set forth in Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"), issued in April 2015. ASU 2015-03 requires that debt issuance costs related to a recognized liability be presented on the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected. ASU 2015-15 provides additional guidance regarding debt issuance costs associated with line-of-credit arrangements, stating that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred issuance costs ratably over the term of the line-of-credit arrangement. We adopted ASU 2015-03 and ASU 2015-15 on December 31, 2015 and the adoption did not have a material effect our consolidated financial statements.
In February 2015, the FASB issued ASU 2015-02, Amendments to the Consolidation Analysis. ASU 2015-02 amends the existing guidance to: (i) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities; (ii) eliminate the presumption that a general partner should consolidate a limited partnership; (iii) affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships and (iv) provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. We adopted ASU 2015-02 on December 31, 2015. The adoption did not did not have an impact on our consolidated financial statements as the adoption did not change our existing conclusion regarding the consolidation of SSE Holdings. See "—Basis of Presentation" for more information.
Recently Issued Accounting Pronouncements       
In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). ASU 2016-09 simplifies certain aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. ASU 2016-09 is effective for reporting periods beginning after December 15, 2016. Early adoption is permitted. We are currently evaluating the impact ASU 2016-09 will have on our consolidated financial statements.
In March 2016, the FASB issued Accounting Standards Update No. 2016-04, Recognition of Breakage for Certain Prepaid Stored-Value Products ("ASU 2016-04"). ASU 2016-04 entitles a company to derecognize amounts related to expected breakage in proportion to the pattern of rights expected to be exercised by the product holder to the extent that it is probable a significant reversal of the recognized breakage amount will not subsequently occur. ASU 2016-04 is effective for reporting periods beginning after December 15, 2017 and is to be applied retrospectively. Early adoption is permitted. We are currently evaluating the impact ASU 2016-04 will have on our consolidated financial statements.
In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases ("ASU 2016-02"). ASU 2016-02 establishes a new lease accounting model, that, for many companies, eliminates the concept of operating leases and requires entities to record assets and liabilities related to leases on the balance sheet for certain types of leases. ASU 2016-02 is effective for reporting periods beginning after December 15, 2018. Early adoption will be permitted for all entities. We are currently evaluating the impact ASU 2016-02 will have on our consolidated financial statements.
In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities ("ASU 2016-01"). ASU 2016-01 requires: (i) equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (ii) simplification of the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (iii) elimination of the requirement for public entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (iv) public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (v) an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (vi) separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; and (vii) clarification that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU 2016-01 is effective for reporting periods beginning after December 15, 2017 and amendments should be applied by means of a cumulative-effect adjustment to the balance sheet at the beginning of the fiscal year of adoption. Early adoption is permitted, subject to certain conditions. We are currently evaluating the impact ASU 2016-01 will have on our consolidated financial statements.
In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Simplifying the Measurement of Inventory ("ASU 2015-11"). Under ASU 2015-11 entities should measure inventory that is not measured using last-in, first-out (LIFO) or the retail inventory method, including inventory that is measured using first-in, first-out (FIFO) or average cost, at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. ASU 2015-11 is effective for reporting periods beginning after December 15, 2016 and is to be applied prospectively. The adoption of ASU 2015-11 is not expected to have a material effect on our consolidated financial statements.
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 supersedes the existing revenue recognition guidance and clarifies the principles for recognizing revenue. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. In March 2016, the FASB issued an amendment to ASU 2014-09 clarifying the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued an amendment to ASU 2014-09 clarifying the considerations for identifying performance obligations and the implementation guidance for revenue recognized from licensing arrangements. In August 2015, the FASB issued an update to ASU 2014-09 deferring the effective date for public entities, on a retrospective basis, to annual reporting periods beginning after December 15, 2017. Early adoption is permitted, subject to certain conditions. We are currently evaluating the impact ASU 2014-09 will have on our consolidated financial statements, as well as the expected timing and method of adoption.
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS
 
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following tables present information about our financial assets and liabilities measured at fair value on a recurring basis as of March 30, 2016 and December 30, 2015, and indicate the classification within the fair value hierarchy.
Cash, Cash Equivalents and Marketable Securities
The following tables summarize our cash, cash equivalents and marketable securities by significant investment categories as of March 30, 2016 and December 30, 2015:
 
 
March 30, 2016
 
 
Cost Basis

 
 Gross Unrealized Gains

 
 Gross Unrealized Losses

 
 Fair Value

 
 Cash and Cash Equivalents

 
Marketable Securities

Cash
$
65,800

 
$
—

 
$
—

 
$
65,800

 
$
65,800

 
$
—

Level 1:
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
55

 
—

 
—

 
55

 
55

 
—

Level 2:
 
 
 
 
 
 
 
 
 
 
 
 
Corporate debt securities(1)
2,397

 
4

 
(17
)
 
2,384

 
—

 
2,384

Total
$
68,252

 
$
4

 
$
(17
)
 
$
68,239

 
$
65,855

 
$
2,384

 
 
December 30, 2015
 
 
Cost Basis

 
 Gross Unrealized Gains

 
 Gross Unrealized Losses

 
 Fair Value

 
 Cash and Cash Equivalents

 
Marketable Securities

Cash
$
70,816

 
$
—

 
$
—

 
$
70,816

 
$
70,816

 
$
—

Level 1:
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
33

 
—

 
—

 
33

 
33

 
—

Level 2:
 
 
 
 
 
 
 
 
 
 
 
 
Corporate debt securities(1)
2,397

 
1

 
(12
)
 
2,386

 
—

 
2,386

Total
$
73,246

 
$
1

 
$
(12
)
 
$
73,235

 
$
70,849

 
$
2,386

(1)
Corporate debt securities were measured at fair value using a market approach utilizing observable prices for identical securities or securities with similar characteristics and inputs that are observable or can be corroborated by observable market data.

All investments that were in an unrealized loss position as of March 30, 2016 have been in a continuous loss position for less than 12 months. Interest income related to our available-for-sale securities of $23 was included in interest expense, net on the Condensed Consolidated Statement of Income (Loss) for the thirteen weeks ended March 30, 2016. No interest income related to our available-for-sale securities was recognized for the thirteen weeks ended April 1, 2015. There were no realized gains or losses on available-for-sale securities for the thirteen weeks ended March 30, 2016 and April 1, 2015. Net unrealized losses on available-for-sale securities totaling $2 for the thirteen weeks ended March 30, 2016 were included in other comprehensive loss on the Condensed Consolidated Statement of Comprehensive Income (Loss). There were no unrealized gains or losses on available-for-sale securities for the thirteen weeks ended April 1, 2015.
The following table summarizes, by contractual maturity date, the estimated fair value of our investments in marketable debt securities that are accounted for as available-for-sale securities:
 
March 30
2016

Due within one year
$
724

Due after one year through 5 years
1,660

Due after 5 years through 10 years
—

Due after 10 years
—

Total
$
2,384


We periodically review our marketable debt securities for other-than-temporary impairment. We consider factors such as the duration, severity and the reason for the decline in value, the potential recovery period and our intent to sell. We also consider whether (i) it is more likely than not that we will be required to sell the debt securities before recovery of their amortized cost basis, and (ii) the amortized cost basis cannot be recovered as a result of credit losses. As of March 30, 2016 and December 30, 2015, the declines in the market value of our marketable securities investment portfolio were considered to be temporary in nature.
Other Financial Instruments
The carrying value of our other financial instruments, including accounts receivable, accounts payable, and accrued expenses as of March 30, 2016 and December 30, 2015 approximated their fair value due to the short-term nature of these financial instruments.
Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
Assets and liabilities that are measured at fair value on a non-recurring basis include our long-lived assets and indefinite-lived intangible assets. There were no impairments recognized during the thirteen weeks ended March 30, 2016 and April 1, 2015 .
INVENTORIES
INVENTORIES
INVENTORIES
 
Inventories as of March 30, 2016 and December 30, 2015 consisted of the following:
 
March 30
2016

 
December 30
2015

Food
$
407

 
$
328

Wine
33

 
30

Beer
39

 
46

Beverages
64

 
57

Retail merchandise
78

 
82

Inventories
$
621

 
$
543

PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT
 
Property and equipment as of March 30, 2016 and December 30, 2015 consisted of the following:
 
March 30
2016

 
December 30
2015

Leasehold improvements
$
89,151

 
$
82,904

Equipment
18,029

 
16,903

Furniture and fixtures
5,492

 
4,965

Computer equipment and software
5,599

 
5,197

Construction in progress
10,633

 
6,591

Property and equipment, gross
128,904

 
116,560

Less: accumulated depreciation
26,625

 
23,519

Property and equipment, net
$
102,279

 
$
93,041

SUPPLEMENTAL BALANCE SHEET INFORMATION
SUPPLEMENTAL BALANCE SHEET INFORMATION
SUPPLEMENTAL BALANCE SHEET INFORMATION
 
The components of other current liabilities as of March 30, 2016 and December 30, 2015 are as follows:
 
March 30
2016

 
December 30
2015

Sales tax payable
$
1,368

 
$
1,073

Current portion of liabilities under tax receivable agreement
2,159

 
2,157

Gift card liability
768

 
833

Other
731

 
551

Other current liabilities
$
5,026

 
$
4,614

DEBT
DEBT
DEBT
 
In January 2015, we executed a Third Amended and Restated Credit Agreement, which became effective on February 4, 2015 (together with the prior agreements and amendments, and as further amended, the "Revolving Credit Facility"), which provides for a revolving total commitment amount of $50,000, of which $20,000 is available immediately. The Revolving Credit Facility will mature and all amounts outstanding will be due and payable five years from the effective date. The Revolving Credit Facility permits the issuance of letters of credit upon our request of up to $10,000. Borrowings under the Revolving Credit Facility bear interest at either: (i) LIBOR plus a percentage ranging from 2.5% to 3.5% or (ii) the prime rate plus a percentage ranging from 0.0% to 1.0%, depending on the type of borrowing made under the Revolving Credit Facility. As of March 30, 2016 and December 30, 2015, there were no amounts outstanding under the Revolving Credit Facility. As of March 30, 2016, we had $19,920 of availability under the Revolving Credit Facility, after giving effect to $80 in outstanding letters of credit.
The Revolving Credit Facility is secured by a first-priority security interest in substantially all of the assets of SSE Holdings and the guarantors. The obligations under the Revolving Credit Facility are guaranteed by each of SSE Holdings' wholly-owned domestic subsidiaries (with certain exceptions).
The Revolving Credit Facility contains a number of covenants that, among other things, limit our ability to, subject to specified exceptions, incur additional debt; incur additional liens and contingent liabilities; sell or dispose of assets; merge with or acquire other companies; liquidate or dissolve ourselves; pay dividends or make distributions; engage in businesses that are not in a related line of business; make loans, advances or guarantees; engage in transactions with affiliates; and make investments. In addition, the Revolving Credit Facility contains certain cross-default provisions. We are required to maintain a specified consolidated fixed-charge coverage ratio and a specified funded net debt to adjusted EBITDA ratio, both as defined under the Revolving Credit Facility. As of March 30, 2016, we were in compliance with all covenants.
Subsequent to the quarter, we failed to furnish audited financial statements of SSE Holdings, as required under the Revolving Credit Facility if certain financial tests are not met. As a result, we were considered to be in default. In May 2016, we obtained a waiver for the covenant violation and entered into an amendment to the Revolving Credit Facility. As no amounts were outstanding at the time, the default and subsequent waiver had no impact to our consolidated financial statements. See Note 15 for further details.
In March 2013, we entered into a promissory note in the amount of $313 in connection with the purchase of a liquor license. Interest on the outstanding principal balance of this note is due and payable on a monthly basis from the effective date at a rate of 5.0% per year. The entire principal balance and interest is due and payable on the earlier of the maturity date, which is the expiration of the lease in June 2023, or the date of the sale of the license. As of March 30, 2016 and December 30, 2015, the outstanding balance of the promissory note was $313. Subsequent to the quarter, we repaid the entire outstanding balance of the promissory note. See Note 15 for further details.
Total interest costs incurred were $87 and $186 for the thirteen weeks ended March 30, 2016 and April 1, 2015, respectively. Total amounts capitalized into property and equipment were $108 for the thirteen weeks ended April 1, 2015. No amounts were capitalized for the thirteen weeks ended March 30, 2016.
NON-CONTROLLING INTERESTS
NON-CONTROLLING INTERESTS
NON-CONTROLLING INTERESTS
 
We are the sole managing member of SSE Holdings and, as a result, consolidate the financial results of SSE Holdings. We report a non-controlling interest representing the economic interest in SSE Holdings held by the other members of SSE Holdings. The Third Amended and Restated Limited Liability Company Agreement of SSE Holdings provides that holders of LLC Interests may, from time to time, require SSE Holdings to redeem all or a portion of their LLC Interests for newly-issued shares of Class A common stock on a one-for-one basis. In connection with any redemption or exchange, we will receive a corresponding number of LLC Interests, increasing our total ownership interest in SSE Holdings. Changes in our ownership interest in SSE Holdings while we retain our controlling interest in SSE Holdings will be accounted for as equity transactions. As such, future redemptions or direct exchanges of LLC Interests in SSE Holdings by the other members of SSE Holdings will result in a change in ownership and reduce the amount recorded as non-controlling interest and increase additional paid-in capital.
The following table summarizes the ownership interest in SSE Holdings as of March 30, 2016 and December 30, 2015.
 
March 30, 2016
 
 
December 30, 2015
 
 
LLC Interests

 
Ownership %

 
LLC Interests

 
Ownership %

Number of LLC Interests held by Shake Shack Inc.
21,700,184

 
59.8
%
 
19,789,259

 
54.6
%
Number of LLC Interests held by non-controlling interest holders
14,582,886

 
40.2
%
 
16,460,741

 
45.4
%
Total LLC Interests outstanding
36,283,070

 
100.0
%
 
36,250,000

 
100.0
%

The weighted average ownership percentages for the applicable reporting periods are used to attribute net income and other comprehensive income to Shake Shack Inc. and the non-controlling interest holders. The non-controlling interest holders' weighted average ownership percentage for the thirteen weeks ended March 30, 2016 was 43.9%. For the thirteen weeks ended April 1, 2015, net income was attributed to non-controlling interest holders only for the period subsequent to the IPO and the organizational transactions completed in connection with our IPO, based on a weighted-average ownership percentage of 66.7%.
The following table summarizes the effects of changes in ownership in SSE Holdings on our equity during the thirteen weeks ended March 30, 2016 and April 1, 2015.
 
 
Thirteen Weeks Ended
 
 
March 30
2016

 
April 1
2015

Comprehensive income (loss) attributable to Shake Shack Inc.
$
1,461

 
$
(12,668
)
Transfers (to) from non-controlling interests:
 
 
 
 
Increase in additional paid-in capital as a result of the settlement of unit appreciation rights
—

 
987

 
Decrease in additional paid-in as a result of the organizational transactions completed in connection with our IPO
—

 
(75,182
)
 
Increase in additional paid-in capital as a result of the redemption of LLC Interests
4,642

 
—

 
Decrease in additional paid-in capital as a result of contributions made related to equity-based compensation
1,060

 
—

 
Increase in additional paid-in capital as a result of stock option exercises
216

 
—

Total effect of changes in ownership interest on equity attributable to Shake Shack Inc.
$
7,379

 
$
(86,863
)

In February 2015, we used the net proceeds from our IPO to purchase 5,750,000 newly-issued LLC Interests. Additionally, in connection with our IPO, we acquired 5,968,841 LLC Interests through the acquisition, by merger, of two entities there were owned by former indirect members of SSE Holdings. Pursuant to the LLC Agreement, we received 339,306 LLC Interests as a result of the issuance of 339,306 shares of Class A common stock in settlement of the outstanding UARs.
During thirteen weeks ended March 30, 2016, an aggregate of 1,877,855 LLC Interests were redeemed by non-controlling interest holders for newly-issued shares of Class A common stock, and we received 1,877,855 LLC Interests in connection with these redemptions, increasing our total ownership interest in SSE Holdings. No LLC Interests were redeemed during the thirteen weeks ended April 1, 2015.
During thirteen weeks ended March 30, 2016, we received an aggregate of 33,070 LLC Interests in connection with the exercise of employee stock options. No stock options were exercised during the thirteen weeks ended April 1, 2015.
EQUITY-BASED COMPENSATION
EQUITY-BASED COMPENSATION
EQUITY-BASED COMPENSATION
 
A summary of equity-based compensation expense recognized during the thirteen weeks ended March 30, 2016 and April 1, 2015 is as follows:
 
 
Thirteen Weeks Ended
 
 
 
March 30
2016

 
April 1
2015

Unit appreciation rights
$
—

 
$
11,762

Restricted Class B units
—

 
605

Stock options
1,030

 
792

Equity-based compensation expense
$
1,030

 
$
13,159

 
 
 
 
Total income tax benefit recognized related to equity-based compensation
$
31

 
$
267


Amounts are included in labor and related expenses and general and administrative expense on the Condensed Consolidated Statements of Income (Loss).
Unit Appreciation Rights
Prior to the IPO, we maintained a Unit Appreciation Rights Plan (the "UAR Plan"), effective in fiscal year 2012, and as amended, whereby we had the authority to grant up to 31,303 unit appreciation rights ("UARs") to employees. The UARs granted were subject to continued employment and were only exercisable upon a qualifying transaction, which was either a change of control or an initial public offering. Our IPO constituted a qualifying transaction under the terms of the UAR Plan, and as a result 339,306 shares of Class A common stock were issued upon the settlement of the 22,554 outstanding UARs, net of employee withholding taxes. We recognized compensation expense of $11,762 during the thirteen weeks ended April 1, 2015 upon settlement of the outstanding UARs.
There were no UARs outstanding as of March 30, 2016 or December 30, 2015. No compensation expense was recognized during the thirteen weeks ended March 30, 2016.
Restricted Class B Units
Prior to the IPO, we granted restricted Class B units to certain of our executive officers. These awards were to vest in equal installments over periods ranging from three to five years. If not already fully vested, these units would fully vest (i) upon the occurrence of a change in control event or (ii) upon the occurrence of an initial public offering. The IPO constituted a transaction under the terms of the restricted Class B unit award agreements that resulted in the accelerated vesting of all then-outstanding awards, and we recognized $605 of equity-based compensation expense upon the vesting of these awards during the thirteen weeks ended April 1, 2015.
There were no restricted Class B units outstanding as of March 30, 2016 or December 30, 2015. No compensation expense was recorded during the thirteen weeks ended March 30, 2016.
Stock Options
In January 2015, we adopted the 2015 Incentive Award Plan (the "2015 Plan") under which we may grant up to 5,865,522 stock options and other equity-based awards to employees, directors and officers. The stock options granted generally vest equally over periods ranging from one to five years. We do not use cash to settle any of our equity-based awards, and we issue new shares of Class A common stock upon the exercise of stock options.
A summary of stock option activity for thirteen weeks ended March 30, 2016 is as follows:
 
 
Stock
Options

 
Weighted
Average
Exercise
Price

Outstanding at beginning of period
2,574,981

 
$
21.00

 
Granted
—

 
—

 
Exercised
(38,081
)
 
21.00

 
Forfeited
(11,525
)
 
(21.00
)
Outstanding at end of period
2,525,375

 
$
21.00


As of March 30, 2016, there were 2,525,375 stock options outstanding, of which 523,915 were exercisable. As of March 30, 2016, total unrecognized compensation expense related to unvested stock options, including an estimate for pre-vesting forfeitures, was $15,396, which is expected to be recognized over a weighted-average period of 3.8 years.
INCOME TAXES
INCOME TAXES
INCOME TAXES
 
We are the sole managing member of SSE Holdings, and as a result, consolidate the financial results of SSE Holdings. SSE Holdings is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, SSE Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by SSE Holdings is passed through to and included in the taxable income or loss of its members, including us, on a pro rata basis. We are subject to U.S. federal income taxes, in addition to state and local income taxes with respect to our allocable share of any taxable income or loss of SSE Holdings, as well as any stand-alone income or loss generated by Shake Shack Inc. We are also subject to withholding taxes in foreign jurisdictions.
Income Tax Expense
A reconciliation of income tax expense computed at the U.S. federal statutory income tax rate to the recognized income tax expense is as follows:
 
Thirteen Weeks Ended
 
 
March 30
2016

 
April 1
2015

Expected U.S. federal income taxes at statutory rate (34%)
$
1,581

 
$
(3,749
)
State and local income taxes, net of federal benefit
272

 
(149
)
Foreign withholding taxes
240

 
116

Non-deductible expenses
—

 
235

Tax credits
(39
)
 
—

Non-controlling interest
(755
)
 
3,780

Other
—

 
—

Income tax expense
$
1,299

 
$
233



Our effective income tax rates for the thirteen weeks ended March 30, 2016 and April 1, 2015 were 27.9% and (2.1)%, respectively. As the majority of the pre-tax loss for the thirteen weeks ended April 1, 2015 was generated in the period prior to the organizational transactions completed in connection with the IPO, and prior to our becoming a member of SSE Holdings, we are not entitled to any tax benefits related to those losses. We recognized tax expense on our allocable share of the pre-tax income generated in the period subsequent to becoming a member of SSE Holdings, which resulted in a negative effective tax rate when compared to our consolidated pre-tax loss.
Deferred Tax Assets and Liabilities
During the thirteen weeks ended March 30, 2016, we acquired an aggregate of 1,910,925 LLC Interests in connection with the redemption of LLC Interests and the exercise of employee stock options. We recognized an additional deferred tax asset in the amount of $23,383 associated with the change in the basis difference in our investment in SSE Holdings upon acquisition of these LLC Interests, increasing our total deferred tax asset to $177,754 as of March 30, 2016. However, a portion of the basis difference will only reverse upon the eventual sale of our interest in SSE Holdings, which we expect would result in a capital loss. As of March 30, 2016, we established a valuation allowance in the amount of $20,309 against the deferred tax asset to which this portion relates.
During thirteen weeks ended March 30, 2016, we also recognized $14,023 of deferred tax assets related to additional tax basis increases generated from expected future payments under the Tax Receivable Agreement and related deductions for imputed interest on such payments. As of March 30, 2016, the total deferred tax asset related to these payments was $83,698. See "—Tax Receivable Agreement" for more information.
We evaluate the realizability of our deferred tax assets on a quarterly basis and establish valuation allowances when it is more likely than not that all or a portion of a deferred tax asset may not be realized. As of March 30, 2016, we concluded, based on the weight of all available positive and negative evidence, that all of our deferred tax assets (except for those deferred tax assets described above relating to basis differences that are expected to result in a capital loss upon the eventual sale of our interest in SSE Holdings) are more likely than not to be realized. As such, no additional valuation allowance was recognized.
Uncertain Tax Positions
No uncertain tax positions existed as of March 30, 2016. Shake Shack Inc. was formed in September 2014 and did not engage in any operations prior to the IPO and related organizational transactions. Shake Shack Inc. first filed tax returns for tax year 2014, which is the first tax year subject to examination by taxing authorities for U.S. federal and state income tax purposes. Additionally, although SSE Holdings is treated as a partnership for U.S. federal and state income taxes purposes, it is still required to file an annual U.S. Return of Partnership Income, which is subject to examination by the Internal Revenue Service ("IRS"). The statute of limitations has expired for tax years through 2011 for SSE Holdings.
Tax Receivable Agreement
Pursuant to our election under Section 754 of the Internal Revenue Code (the "Code"), we expect to obtain an increase in our share of the tax basis in the net assets of SSE Holdings when LLC Interests are redeemed or exchanged by the other members of SSE Holdings. We plan to make an election under Section 754 of Code for each taxable year in which a redemption or exchange of LLC Interest occurs. We intend to treat any redemptions and exchanges of LLC Interests as direct purchases of LLC Interests for U.S. federal income tax purposes. These increases in tax basis may reduce the amounts that we would otherwise pay in the future to various tax authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.
On February 4, 2015, we entered into a tax receivable agreement with certain of the then-existing members of SSE Holdings (the "Tax Receivable Agreement") that provides for the payment by us of 85% of the amount of any tax benefits that we actually realize, or in some cases are deemed to realize, as a result of (i) increases in our share of the tax basis in the net assets of SSE Holdings resulting from any redemptions or exchanges of LLC Interests, (ii) tax basis increases attributable to payments made under the Tax Receivable Agreement, and (iii) deductions attributable to imputed interest pursuant to the Tax Receivable Agreement (the "TRA Payments"). We expect to benefit from the remaining 15% of any tax benefits that we may actually realize. The TRA Payments are not conditioned upon any continued ownership interest in SSE Holdings or us. The rights of each SSE Holdings member party under the Tax Receivable Agreement are assignable to transferees of its LLC Interests.
During the thirteen weeks ended March 30, 2016, we acquired an aggregate of 1,877,855 LLC Interests in connection with the redemption of LLC Interests, which resulted in an increase in the tax basis of our investment in SSE Holdings subject to the provisions of the Tax Receivable Agreement. We recognized an additional liability in the amount of $34,920 for the TRA Payments due to the redeeming members, representing 85% of the aggregate tax benefits we expect to realize from the tax basis increases related to the redemption of LLC Interests, after concluding it was probable that such TRA Payments would be paid based on our estimates of future taxable income. As of March 30, 2016, the total amount of TRA Payments due under the Tax Receivable Agreement was $208,010, of which $2,159 was included in other current liabilities on the Condensed Consolidated Balance Sheet. See Note 13 for more information relating to our liabilities under the Tax Receivable Agreement.
EARNINGS PER SHARE
EARNINGS PER SHARE
EARNINGS PER SHARE
 
Basic earnings per share of Class A common stock is computed by dividing net income available to Shake Shack Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income available to Shake Shack Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities.
The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock for the thirteen weeks ended March 30, 2016 and April 1, 2015.
 
 
 
Thirteen Weeks Ended
 
 
 
 
March 30
2016

 
April 1
2015

Numerator:
 
 
 
 
Net income (loss)
$
3,351

 
$
(11,260
)
 
Less: net income attributable to non-controlling interests
1,889

 
1,408

 
Net income (loss) attributable to Shake Shack Inc.
$
1,462

 
$
(12,668
)
Denominator:
 
 
 
 
Weighted-average shares of Class A common stock outstanding—basic
20,353

 
11,953

 
Effect of dilutive securities:
 
 
 
 
 
Stock options
459

 
—

 
Weighted-average shares of Class A common stock outstanding—diluted
20,812

 
11,953

 
 
 
 
 
 
Earnings per share of Class A common stock—basic
$
0.07

 
$
(1.06
)
Earnings per share of Class A common stock—diluted
$
0.07

 
$
(1.06
)

Shares of our Class B common stock do not share in the earnings or losses of Shake Shack and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented.
The following table presents potentially dilutive securities excluded from the computations of diluted earnings per share of Class A common stock for the thirteen weeks ended March 30, 2016 and April 1, 2015.
 
 
 
Thirteen Weeks Ended
 
 
 
March 30
2016
 
April 1
2015
Stock options
—

 
 
2,618,281

(1)
Shares of Class B common stock
14,582,886

(2)
 
24,191,853

(1)
(1)
Excluded from the computation of diluted earnings per share of Class A common stock because the effect would have been anti-dilutive since we recognized a net loss for the period.
(2)
Shares of our Class B common stock are considered potentially dilutive shares of Class A common stock. Amounts have been excluded from the computations of diluted earnings per share of Class A common stock because the effect would have been anti-dilutive under the if-converted and two-class methods.
SUPPLEMENTAL CASH FLOW INFORMATION
SUPPLEMENTAL CASH FLOW INFORMATION
SUPPLEMENTAL CASH FLOW INFORMATION
 
The following table sets forth supplemental cash flow information for the thirteen weeks ended March 30, 2016 and April 1, 2015:
 
 
Thirteen Weeks Ended
 
 
 
March 30
2016

 
April 1
2015

Cash paid for:
 
 
 
 
Income taxes, net of refunds
$
475

 
$
49

 
Interest, net of amounts capitalized
15

 
149

Non-cash investing activities:
 
 
 
 
Accrued purchases of property and equipment
3,133

 
3,088

 
Capitalized equity-based compensation
30

 
—

 
Class A common stock issued in connection with the acquisition of two former indirect members of SSE Holdings
—

 
6

Non-cash financing activities:
 
 
 
 
Cancellation of Class B common stock in connection with certain organizational transactions completed in connection with our IPO
—

 
(6
)
 
Class A common stock issued in connection with the redemption of LLC Interests
2

 
—

 
Cancellation of Class B common stock in connection with the redemption of LLC Interests
(2
)
 
—

 
Establishment of liabilities under tax receivable agreement
34,920

 
5,600

COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES
 
Lease Commitments
We are obligated under various operating leases for Shacks and our home office space, expiring in various years through 2032. Under certain of these leases, we are liable for contingent rent based on a percentage of sales in excess of specified thresholds and are responsible for our proportionate share of real estate taxes and utilities.
As security under the terms of several of our leases, we are obligated under letters of credit totaling $160 as of March 30, 2016. The letters of credit expire on April 23, 2017 and February 28, 2026. In addition, in December 2013, we entered into an irrevocable standby letter of credit in conjunction with our home office lease in the amount of $80. The letter of credit expires in September 2016 and renews automatically for one-year periods through September 30, 2019.
Purchase Commitments
Purchase obligations include legally binding contracts, including commitments for the purchase, construction or remodeling of real estate and facilities, firm minimum commitments for inventory purchases, equipment purchases, marketing-related contracts, software acquisition/license commitments and service contracts. These obligations are generally short-term in nature and are recorded as liabilities when the related goods are received or services rendered. We also enter into long-term, exclusive contracts with certain vendors to supply us with food, beverages and paper goods, obligating us to purchase specified quantities.
Legal Contingencies
In November 2015, we met with a law firm representing two former Shake Shack managers who alleged that we improperly classified our restaurant managers as exempt. Although we have always believed that our managers are properly classified as exempt under both federal and state laws, and have always intended to defend any such allegations vigorously, we agreed to mediate the matter. At the conclusion of the meeting, the parties entered into a Memorandum of Understanding, and we agreed to create a fund of $750 to settle the matter. In exchange, all managers who choose to participate (former and current), including the two former managers, will release Shake Shack from all federal and/or state wage and hour claims that may exist through the settlement date. As part of the settlement process, the law firm filed a Complaint on March 17, 2016 with the Supreme Court of the State of New York (the “Court”), and within the coming weeks will file the final settlement agreement with the Court as well as a motion seeking the Court’s preliminary approval of the settlement. As of March 30, 2016, an accrual in the amount of $770 was recorded for this matter and the related expenses.
We are subject to various legal and regulatory proceedings, claims and liabilities, such as employment-related claims and slip and fall cases, which arise in the ordinary course of business and are generally covered by insurance. As of March 30, 2016, the amount of ultimate liability with respect to these matters was not material.
Liabilities under Tax Receivable Agreement
As described in Note 10, we are a party to the Tax Receivable Agreement under which we are contractually committed to pay the certain of the members of SSE Holdings 85% of the amount of any tax benefits that we actually realize, or in some cases are deemed to realize, as a result of certain transactions. We are not obligated to make any payments under the Tax Receivable Agreement until the tax benefits associated the transaction that gave rise to the payment are realized. Amounts payable under the Tax Receivable Agreement are contingent upon, among other things, (i) generation of future taxable income over the term of the Tax Receivable Agreement and (ii) future changes in tax laws. If we do not generate sufficient taxable income in the aggregate over the term of the Tax Receivable Agreement to utilize the tax benefits, then we would not be required to make the related TRA Payments. During thirteen weeks ended March 30, 2016 and April 1, 2015, we recognized liabilities totaling $34,920 and $5,600, respectively, relating to our obligations under the Tax Receivable Agreement, after concluding that it was probable that we would have sufficient future taxable income to utilize the related tax benefits. As of March 30, 2016 and December 30, 2015, our total obligations under the Tax Receivable Agreement totaled $208,010 and $173,090, respectively. There were no transactions subject to the Tax Receivable Agreement for which we did not recognize the related liability, as we concluded that we would have sufficient future taxable income to utilize all of the related tax benefits.
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS
 
Union Square Hospitality Group
Union Square Hospitality Group, LLC is a stockholder and a party to the Stockholders Agreement dated as of February 4, 2015, as amended, we entered into in connection with our IPO. The Chairman of our Board of Directors serves as the Chief Executive Officer of Union Square Hospitality Group, LLC. As a result, Union Square Hospitality Group, LLC and its subsidiaries (collectively, "USHG") are considered related parties.
Previously, our employees were included in USHG's self-insurance health plan and we paid our portion of the plan costs on a monthly basis to USHG. In February 2015, we established our own self-funded health insurance plan for our employees and ceased payments to USHG. Amounts paid to the USHG for these health insurance costs were $146 for the thirteen weeks ended April 1, 2015. No amounts were paid to USHG for health insurance costs for the thirteen weeks ended March 30, 2016. These amounts are included in labor and related expenses and general and administrative expenses on the Condensed Consolidated Statements of Income (Loss). Additionally, our employees are eligible participants under USHG's 401(k) plan. We pay our share of the employer's matching contributions directly to the third-party plan trustee.
We also pay USHG for certain miscellaneous general operating expenses incurred by them on our behalf. Total amounts paid to USHG for general corporate expenses were $6 and $65 for the thirteen weeks ended March 30, 2016 and April 1, 2015, respectively, and are included in general and administrative expenses on the Condensed Consolidated Statements of Income (Loss).
No amounts were payable to USHG as of March 30, 2016. Total amounts payable to USHG as of December 30, 2015 were $2. These amounts are included in other current liabilities on the Condensed Consolidated Balance Sheets. Amounts due from USHG for expenses paid by us on behalf of USHG totaled $36 as of March 30, 2016, which is included in prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets. No amounts were due from USHG as of December 30, 2015.
Hudson Yards Sports and Entertainment
In fiscal 2011, we entered into a Master License Agreement (an "MLA") with Hudson Yards Sports and Entertainment LLC ("HYSE"), a subsidiary of USHG and a related party, to operate Shake Shack branded limited menu concession stands in sports and entertainment venues within the United States. The agreement expires on December 31, 2027 and includes five consecutive five-year renewal options at HYSE's option. As consideration for these rights, HYSE pays us a license fee based on a percentage of net food sales, as defined in the MLA. HYSE also pays us a percentage of profits on sales of branded beverages, as defined in the MLA. No amounts were paid to us by HYSE for the thirteen weeks ended March 30, 2016 and April 1, 2015. Total amounts due from HYSE as of March 30, 2016 were $4, which is included in prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets. No amounts were due from HYSE as of December 30, 2015 due to the seasonal nature of the concession stands.
Madison Square Park Conservancy
The Chairman of our Board of Directors serves as a director of the Madison Square Park Conservancy ("MSP Conservancy"), with which we have a license agreement and pay license fees to operate our Madison Square Park Shack. Amounts paid to Madison Square Park Conservancy as rent amounted to $195 for the thirteen weeks ended March 30, 2016. No amounts were paid to Madison Square Park Conservancy for the thirteen weeks ended April 1, 2015 as our Madison Square Park location was closed for renovations during that time. These amounts are included in occupancy and related expenses on the Condensed Consolidated Statements of Income (Loss). No amounts were due to the MSP Conservancy as of March 30, 2016. Total amounts due to the MSP Conservancy as of December 30, 2015 were $17, which is included in accrued expenses on the Condensed Consolidated Balance Sheets.
Tax Receivable Agreement
As described in Note 11, we entered into a tax receivable agreement with certain members of SSE Holdings that provides for the payment by us of 85% of the amount of tax benefits, if any, that Shake Shack actually realizes or in some cases is deemed to realize as a result of certain transactions. During the thirteen weeks ended March 30, 2016 and April 1, 2015, no amounts paid to any members of SSE Holdings pursuant to the Tax Receivable Agreement. As of March 30, 2016 and December 30, 2015, total amounts due to members of SSE Holdings under the under the Tax Receivable Agreement were $208,010 and $173,090, respectively.
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS
 
On March 31, 2016, we repaid the entire outstanding balance of our promissory note, a total of $313. See Note 7 for details regarding the promissory note.
Subsequent to the quarter, we failed to furnish audited financial statements of SSE Holdings, as required under the Revolving Credit Facility if certain financial tests are not met. As a result, we were considered to be in default. In May 2016, we obtained a waiver for the covenant violation and entered into an amendment to the Revolving Credit Facility. As no amounts were outstanding at the time, the default and subsequent waiver had no impact to our consolidated financial statements.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
Basis of Presentation 
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements include the accounts of Shake Shack Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and on a basis consistent in all material respects with the accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 30, 2015 ("2015 Form 10-K"). In our opinion, all adjustments, which are normal and recurring in nature, necessary for a fair presentation of our financial position and results of operation have been included. Certain reclassifications have been made to prior period amounts to conform to the current year presentation. Operating results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year.
The accompanying Condensed Consolidated Balance Sheet as of December 30, 2015 has been derived from the audited financial statements at that date but does not include all of the disclosures required by GAAP. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in our 2015 Form 10-K.
In February 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2015-02, Amendments to the Consolidation Analysis ("ASU 2015-02"). ASU 2015-02 amended the existing guidance to, among other things, modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities, and eliminate the presumption that a general partner should consolidate a limited partnership. We adopted ASU 2015-02 on December 31, 2015. Prior to the adoption of ASU 2015-02, we consolidated SSE Holdings as a voting interest entity. Pursuant to the provisions of ASU 2015-02, SSE Holdings is now considered a VIE. Shake Shack Inc. is the primary beneficiary as we have the majority economic interest in SSE Holdings and, as the sole managing member, have decision making authority that significantly affects the economic performance of the entity, while the limited partners have no substantive kick-out or participating rights. As a result, we will continue to consolidate SSE Holdings. The assets and liabilities of SSE Holdings represent substantially all of our consolidated assets and liabilities with the exception of certain deferred taxes and liabilities under the Tax Receivable Agreement. As of March 30, 2016 and December 30, 2015, the net assets of SSE Holdings were $134,524 and $124,214, respectively. The assets of SSE Holdings are subject to certain restrictions in SSE Holdings' revolving credit agreements. See Note 7 for more information.
Fiscal Year 
Fiscal Year
We operate on a 52/53 week fiscal year ending on the last Wednesday in December. Fiscal 2016 contains 52 weeks and ends on December 28, 2016. Fiscal 2015 contained 52 weeks and ended on December 30, 2015. Unless otherwise stated, references to years in this report relate to fiscal years.
Use of Estimates 
Use of Estimates
The preparation of these condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of sales and expenses during the reporting period. Actual results could differ from those estimates.
Recently Adopted and Issued Accounting Pronouncements 
Recently Adopted Accounting Pronouncements       
In April 2015, the FASB issued Accounting Standards Update No. 2015-05, Customers' Accounting for Fees Paid in a Cloud Computing Arrangement ("ASU 2015-05"). ASU 2015-05 provides guidance in evaluating whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the software license element of the arrangement should be accounted for as an acquisition of a software license. If the arrangement does not contain a software license, it should be accounted for as a service contract. We adopted ASU 2015-05 on December 31, 2015 and elected to adopt the standard on a prospective basis. The adoption of ASU 2015-05 did not have a material impact on our consolidated financial statements.
In August 2015, the FASB issued Accounting Standards Update No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements ("ASU 2015-15"), which clarifies the guidance set forth in Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"), issued in April 2015. ASU 2015-03 requires that debt issuance costs related to a recognized liability be presented on the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected. ASU 2015-15 provides additional guidance regarding debt issuance costs associated with line-of-credit arrangements, stating that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred issuance costs ratably over the term of the line-of-credit arrangement. We adopted ASU 2015-03 and ASU 2015-15 on December 31, 2015 and the adoption did not have a material effect our consolidated financial statements.
In February 2015, the FASB issued ASU 2015-02, Amendments to the Consolidation Analysis. ASU 2015-02 amends the existing guidance to: (i) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities; (ii) eliminate the presumption that a general partner should consolidate a limited partnership; (iii) affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships and (iv) provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. We adopted ASU 2015-02 on December 31, 2015. The adoption did not did not have an impact on our consolidated financial statements as the adoption did not change our existing conclusion regarding the consolidation of SSE Holdings. See "—Basis of Presentation" for more information.
Recently Issued Accounting Pronouncements       
In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). ASU 2016-09 simplifies certain aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. ASU 2016-09 is effective for reporting periods beginning after December 15, 2016. Early adoption is permitted. We are currently evaluating the impact ASU 2016-09 will have on our consolidated financial statements.
In March 2016, the FASB issued Accounting Standards Update No. 2016-04, Recognition of Breakage for Certain Prepaid Stored-Value Products ("ASU 2016-04"). ASU 2016-04 entitles a company to derecognize amounts related to expected breakage in proportion to the pattern of rights expected to be exercised by the product holder to the extent that it is probable a significant reversal of the recognized breakage amount will not subsequently occur. ASU 2016-04 is effective for reporting periods beginning after December 15, 2017 and is to be applied retrospectively. Early adoption is permitted. We are currently evaluating the impact ASU 2016-04 will have on our consolidated financial statements.
In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases ("ASU 2016-02"). ASU 2016-02 establishes a new lease accounting model, that, for many companies, eliminates the concept of operating leases and requires entities to record assets and liabilities related to leases on the balance sheet for certain types of leases. ASU 2016-02 is effective for reporting periods beginning after December 15, 2018. Early adoption will be permitted for all entities. We are currently evaluating the impact ASU 2016-02 will have on our consolidated financial statements.
In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities ("ASU 2016-01"). ASU 2016-01 requires: (i) equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (ii) simplification of the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (iii) elimination of the requirement for public entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (iv) public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (v) an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (vi) separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; and (vii) clarification that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU 2016-01 is effective for reporting periods beginning after December 15, 2017 and amendments should be applied by means of a cumulative-effect adjustment to the balance sheet at the beginning of the fiscal year of adoption. Early adoption is permitted, subject to certain conditions. We are currently evaluating the impact ASU 2016-01 will have on our consolidated financial statements.
In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Simplifying the Measurement of Inventory ("ASU 2015-11"). Under ASU 2015-11 entities should measure inventory that is not measured using last-in, first-out (LIFO) or the retail inventory method, including inventory that is measured using first-in, first-out (FIFO) or average cost, at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. ASU 2015-11 is effective for reporting periods beginning after December 15, 2016 and is to be applied prospectively. The adoption of ASU 2015-11 is not expected to have a material effect on our consolidated financial statements.
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 supersedes the existing revenue recognition guidance and clarifies the principles for recognizing revenue. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. In March 2016, the FASB issued an amendment to ASU 2014-09 clarifying the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued an amendment to ASU 2014-09 clarifying the considerations for identifying performance obligations and the implementation guidance for revenue recognized from licensing arrangements. In August 2015, the FASB issued an update to ASU 2014-09 deferring the effective date for public entities, on a retrospective basis, to annual reporting periods beginning after December 15, 2017. Early adoption is permitted, subject to certain conditions. We are currently evaluating the impact ASU 2014-09 will have on our consolidated financial statements, as well as the expected timing and method of adoption.
FAIR VALUE MEASUREMENTS (Tables)
Schedule of Cash and Cash Equivalents 
The following tables summarize our cash, cash equivalents and marketable securities by significant investment categories as of March 30, 2016 and December 30, 2015:
 
 
March 30, 2016
 
 
Cost Basis

 
 Gross Unrealized Gains

 
 Gross Unrealized Losses

 
 Fair Value

 
 Cash and Cash Equivalents

 
Marketable Securities

Cash
$
65,800

 
$
—

 
$
—

 
$
65,800

 
$
65,800

 
$
—

Level 1:
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
55

 
—

 
—

 
55

 
55

 
—

Level 2:
 
 
 
 
 
 
 
 
 
 
 
 
Corporate debt securities(1)
2,397

 
4

 
(17
)
 
2,384

 
—

 
2,384

Total
$
68,252

 
$
4

 
$
(17
)
 
$
68,239

 
$
65,855

 
$
2,384

 
 
December 30, 2015
 
 
Cost Basis

 
 Gross Unrealized Gains

 
 Gross Unrealized Losses

 
 Fair Value

 
 Cash and Cash Equivalents

 
Marketable Securities

Cash
$
70,816

 
$
—

 
$
—

 
$
70,816

 
$
70,816

 
$
—

Level 1:
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
33

 
—

 
—

 
33

 
33

 
—

Level 2:
 
 
 
 
 
 
 
 
 
 
 
 
Corporate debt securities(1)
2,397

 
1

 
(12
)
 
2,386

 
—

 
2,386

Total
$
73,246

 
$
1

 
$
(12
)
 
$
73,235

 
$
70,849

 
$
2,386

(1)
Corporate debt securities were measured at fair value using a market approach utilizing observable prices for identical securities or securities with similar characteristics and inputs that are observable or can be corroborated by observable market data.
Schedule of Investments in Marketable Securities, Accounted for as Available-For-Sale Securities 
The following table summarizes, by contractual maturity date, the estimated fair value of our investments in marketable debt securities that are accounted for as available-for-sale securities:
 
March 30
2016

Due within one year
$
724

Due after one year through 5 years
1,660

Due after 5 years through 10 years
—

Due after 10 years
—

Total
$
2,384

INVENTORIES (Tables)
Inventories
Inventories as of March 30, 2016 and December 30, 2015 consisted of the following:
 
March 30
2016

 
December 30
2015

Food
$
407

 
$
328

Wine
33

 
30

Beer
39

 
46

Beverages
64

 
57

Retail merchandise
78

 
82

Inventories
$
621

 
$
543

PROPERTY AND EQUIPMENT (Tables)
Property, Plant and Equipment
Property and equipment as of March 30, 2016 and December 30, 2015 consisted of the following:
 
March 30
2016

 
December 30
2015

Leasehold improvements
$
89,151

 
$
82,904

Equipment
18,029

 
16,903

Furniture and fixtures
5,492

 
4,965

Computer equipment and software
5,599

 
5,197

Construction in progress
10,633

 
6,591

Property and equipment, gross
128,904

 
116,560

Less: accumulated depreciation
26,625

 
23,519

Property and equipment, net
$
102,279

 
$
93,041

SUPPLEMENTAL BALANCE SHEET INFORMATION (Tables)
Supplemental Balance Sheet Information
The components of other current liabilities as of March 30, 2016 and December 30, 2015 are as follows:
 
March 30
2016

 
December 30
2015

Sales tax payable
$
1,368

 
$
1,073

Current portion of liabilities under tax receivable agreement
2,159

 
2,157

Gift card liability
768

 
833

Other
731

 
551

Other current liabilities
$
5,026

 
$
4,614

NON-CONTROLLING INTERESTS (Tables)
Schedule of ownership interests in SSE holdings 
The following table summarizes the ownership interest in SSE Holdings as of March 30, 2016 and December 30, 2015.
 
March 30, 2016
 
 
December 30, 2015
 
 
LLC Interests

 
Ownership %

 
LLC Interests

 
Ownership %

Number of LLC Interests held by Shake Shack Inc.
21,700,184

 
59.8
%
 
19,789,259

 
54.6
%
Number of LLC Interests held by non-controlling interest holders
14,582,886

 
40.2
%
 
16,460,741

 
45.4
%
Total LLC Interests outstanding
36,283,070

 
100.0
%
 
36,250,000

 
100.0
%
Schedule of non-controlling interest 
The following table summarizes the effects of changes in ownership in SSE Holdings on our equity during the thirteen weeks ended March 30, 2016 and April 1, 2015.
 
 
Thirteen Weeks Ended
 
 
March 30
2016

 
April 1
2015

Comprehensive income (loss) attributable to Shake Shack Inc.
$
1,461

 
$
(12,668
)
Transfers (to) from non-controlling interests:
 
 
 
 
Increase in additional paid-in capital as a result of the settlement of unit appreciation rights
—

 
987

 
Decrease in additional paid-in as a result of the organizational transactions completed in connection with our IPO
—

 
(75,182
)
 
Increase in additional paid-in capital as a result of the redemption of LLC Interests
4,642

 
—

 
Decrease in additional paid-in capital as a result of contributions made related to equity-based compensation
1,060

 
—

 
Increase in additional paid-in capital as a result of stock option exercises
216

 
—

Total effect of changes in ownership interest on equity attributable to Shake Shack Inc.
$
7,379

 
$
(86,863
)
EQUITY-BASED COMPENSATION (Tables)
Schedule of equity-based compensation expense recognized 
A summary of equity-based compensation expense recognized during the thirteen weeks ended March 30, 2016 and April 1, 2015 is as follows:
 
 
Thirteen Weeks Ended
 
 
 
March 30
2016

 
April 1
2015

Unit appreciation rights
$
—

 
$
11,762

Restricted Class B units
—

 
605

Stock options
1,030

 
792

Equity-based compensation expense
$
1,030

 
$
13,159

 
 
 
 
Total income tax benefit recognized related to equity-based compensation
$
31

 
$
267

Schedule of stock options, activity 
A summary of stock option activity for thirteen weeks ended March 30, 2016 is as follows:
 
 
Stock
Options

 
Weighted
Average
Exercise
Price

Outstanding at beginning of period
2,574,981

 
$
21.00

 
Granted
—

 
—

 
Exercised
(38,081
)
 
21.00

 
Forfeited
(11,525
)
 
(21.00
)
Outstanding at end of period
2,525,375

 
$
21.00

INCOME TAXES (Tables)
Schedule of effective income tax rate reconciliation
A reconciliation of income tax expense computed at the U.S. federal statutory income tax rate to the recognized income tax expense is as follows:
 
Thirteen Weeks Ended
 
 
March 30
2016

 
April 1
2015

Expected U.S. federal income taxes at statutory rate (34%)
$
1,581

 
$
(3,749
)
State and local income taxes, net of federal benefit
272

 
(149
)
Foreign withholding taxes
240

 
116

Non-deductible expenses
—

 
235

Tax credits
(39
)
 
—

Non-controlling interest
(755
)
 
3,780

Other
—

 
—

Income tax expense
$
1,299

 
$
233

EARNINGS PER SHARE (Tables)
Schedule of earnings per share 
The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock for the thirteen weeks ended March 30, 2016 and April 1, 2015.
 
 
 
Thirteen Weeks Ended
 
 
 
 
March 30
2016

 
April 1
2015

Numerator:
 
 
 
 
Net income (loss)
$
3,351

 
$
(11,260
)
 
Less: net income attributable to non-controlling interests
1,889

 
1,408

 
Net income (loss) attributable to Shake Shack Inc.
$
1,462

 
$
(12,668
)
Denominator:
 
 
 
 
Weighted-average shares of Class A common stock outstanding—basic
20,353

 
11,953

 
Effect of dilutive securities:
 
 
 
 
 
Stock options
459

 
—

 
Weighted-average shares of Class A common stock outstanding—diluted
20,812

 
11,953

 
 
 
 
 
 
Earnings per share of Class A common stock—basic
$
0.07

 
$
(1.06
)
Earnings per share of Class A common stock—diluted
$
0.07

 
$
(1.06
)
Schedule of antidilutive securities excluded from computation of earnings per share 
The following table presents potentially dilutive securities excluded from the computations of diluted earnings per share of Class A common stock for the thirteen weeks ended March 30, 2016 and April 1, 2015.
 
 
 
Thirteen Weeks Ended
 
 
 
March 30
2016
 
April 1
2015
Stock options
—

 
 
2,618,281

(1)
Shares of Class B common stock
14,582,886

(2)
 
24,191,853

(1)
(1)
Excluded from the computation of diluted earnings per share of Class A common stock because the effect would have been anti-dilutive since we recognized a net loss for the period.
(2)
Shares of our Class B common stock are considered potentially dilutive shares of Class A common stock. Amounts have been excluded from the computations of diluted earnings per share of Class A common stock because the effect would have been anti-dilutive under the if-converted and two-class methods.
SUPPLEMENTAL CASH FLOW INFORMATION (Tables)
Schedule of Cash Flow Information
The following table sets forth supplemental cash flow information for the thirteen weeks ended March 30, 2016 and April 1, 2015:
 
 
Thirteen Weeks Ended
 
 
 
March 30
2016

 
April 1
2015

Cash paid for:
 
 
 
 
Income taxes, net of refunds
$
475

 
$
49

 
Interest, net of amounts capitalized
15

 
149

Non-cash investing activities:
 
 
 
 
Accrued purchases of property and equipment
3,133

 
3,088

 
Capitalized equity-based compensation
30

 
—

 
Class A common stock issued in connection with the acquisition of two former indirect members of SSE Holdings
—

 
6

Non-cash financing activities:
 
 
 
 
Cancellation of Class B common stock in connection with certain organizational transactions completed in connection with our IPO
—

 
(6
)
 
Class A common stock issued in connection with the redemption of LLC Interests
2

 
—

 
Cancellation of Class B common stock in connection with the redemption of LLC Interests
(2
)
 
—

 
Establishment of liabilities under tax receivable agreement
34,920

 
5,600

NATURE OF OPERATIONS (Details) (USD $)
0 Months Ended
Mar. 30, 2016
Restaurant
Dec. 30, 2015
Feb. 4, 2015
IPO
Common stock
Class A Common Stock
Feb. 4, 2015
IPO
Common stock
Class A Common Stock
Mar. 30, 2016
UNITED STATES
Company-operated
Restaurant
Mar. 30, 2016
UNITED STATES
Licensed
Restaurant
Mar. 30, 2016
Non-United States
Licensed
Restaurant
Class of Stock [Line Items]
 
 
 
 
 
 
 
Shares issued during the period (in shares)
 
 
5,750,000 
 
 
 
 
Shares issued, share price (in USD per share)
 
 
 
$ 21 
 
 
 
Ownership percent of noncontrolling interest
59.80% 
54.60% 
 
 
 
 
 
Number of restaurants
88 
 
 
 
47 
5 
36 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (Variable Interest Entity, Primary Beneficiary, USD $)
In Thousands, unless otherwise specified
Mar. 30, 2016
Dec. 30, 2015
Variable Interest Entity, Primary Beneficiary
 
 
Variable Interest Entity [Line Items]
 
 
Net assets held by SSE holders
$ 134,524 
$ 124,214 
FAIR VALUE MEASUREMENTS - Cash, Cash Equivalents and Marketable Securities (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 30, 2016
Dec. 30, 2015
Apr. 1, 2015
Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
 
 
 
 
Cash cost basis
$ 65,855 
$ 70,849 
$ 60,834 
$ 2,677 
Cash and cash equivalents fair value
65,855 
70,849 
 
 
Gross Unrealized Gains
4 
1 
 
 
Gross Unrealized Losses
(17)
(12)
 
 
Fair value of marketable securities
2,384 
2,386 
 
 
Total cost basis
68,252 
73,246 
 
 
Total fair value
68,239 
73,235 
 
 
Level 2 |
Corporate debt securities
 
 
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
 
 
Marketable securities cost basis
2,397 
2,397 
 
 
Gross Unrealized Gains
4 
1 
 
 
Gross Unrealized Losses
(17)
(12)
 
 
Fair value of marketable securities
2,384 
2,386 
 
 
Cash
 
 
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
 
 
Cash cost basis
65,800 
70,816 
 
 
Cash and cash equivalents fair value
65,800 
70,816 
 
 
Money market funds |
Level 1
 
 
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
 
 
Cash cost basis
55 
33 
 
 
Cash and cash equivalents fair value
$ 55 
$ 33 
 
 
FAIR VALUE MEASUREMENTS - Additional Information (Details) (USD $)
3 Months Ended
Mar. 30, 2016
Apr. 1, 2015
Fair Value Disclosures [Abstract]
 
 
Interest income related to available-for-sale securities
$ 23,000 
$ 0 
Realized gains or losses on available-for-sale securities
0 
0 
Net unrealized loss included in other comprehensive loss
2,000 
0 
Asset impairment charges
$ 0 
$ 0 
FAIR VALUE MEASUREMENTS - Estimated Fair Value of Investments (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 30, 2016
Fair Value Disclosures [Abstract]
 
Due within one year
$ 724 
Due after one year through 5 years
1,660 
Due after 5 years through 10 years
0 
Due after 10 years
0 
Total
$ 2,384 
INVENTORIES (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 30, 2016
Dec. 30, 2015
Inventory [Line Items]
 
 
Inventories
$ 621 
$ 543 
Food
 
 
Inventory [Line Items]
 
 
Inventories
407 
328 
Wine
 
 
Inventory [Line Items]
 
 
Inventories
33 
30 
Beer
 
 
Inventory [Line Items]
 
 
Inventories
39 
46 
Beverages
 
 
Inventory [Line Items]
 
 
Inventories
64 
57 
Retail merchandise
 
 
Inventory [Line Items]
 
 
Inventories
$ 78 
$ 82 
PROPERTY AND EQUIPMENT (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 30, 2016
Dec. 30, 2015
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
$ 128,904 
$ 116,560 
Less: accumulated depreciation
26,625 
23,519 
Property and equipment, net
102,279 
93,041 
Leasehold improvements
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
89,151 
82,904 
Equipment
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
18,029 
16,903 
Furniture and fixtures
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
5,492 
4,965 
Computer equipment and software
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
5,599 
5,197 
Construction in progress
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
$ 10,633 
$ 6,591 
SUPPLEMENTAL BALANCE SHEET INFORMATION (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 30, 2016
Dec. 30, 2015
Other Liabilities, Current
 
 
Sales tax payable
$ 1,368 
$ 1,073 
Current portion of liabilities under tax receivable agreement
2,159 
2,157 
Gift card liability
768 
833 
Other
731 
551 
Other current liabilities
$ 5,026 
$ 4,614 
DEBT (Details) (USD $)
3 Months Ended 3 Months Ended 0 Months Ended 0 Months Ended
Mar. 30, 2016
Apr. 1, 2015
Dec. 30, 2015
Mar. 30, 2016
Notes payable
Dec. 30, 2015
Notes payable
Mar. 31, 2013
Notes payable
Mar. 30, 2016
Letter of credit
Feb. 4, 2015
Revolving Credit Facility
Line of credit
Mar. 30, 2016
Revolving Credit Facility
Line of credit
Dec. 30, 2015
Revolving Credit Facility
Line of credit
Feb. 4, 2015
Revolving Credit Facility
Line of credit
Mar. 30, 2016
Revolving Credit Facility
Letter of credit
Line of credit
Feb. 4, 2015
Revolving Credit Facility
Letter of credit
Line of credit
Feb. 4, 2015
Revolving Credit Facility
Minimum
Line of credit
London Interbank Offered Rate (LIBOR)
Feb. 4, 2015
Revolving Credit Facility
Minimum
Line of credit
Prime rate
Feb. 4, 2015
Revolving Credit Facility
Maximum
Line of credit
London Interbank Offered Rate (LIBOR)
Feb. 4, 2015
Revolving Credit Facility
Maximum
Line of credit
Prime rate
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
 
 
 
 
 
 
 
 
$ 50,000,000 
 
$ 10,000,000 
 
 
 
 
Current borrowing capacity
 
 
 
 
 
 
 
 
 
 
20,000,000 
80,000 
 
 
 
 
 
Term to maturity
 
 
 
 
 
 
1 year 
5 years 
 
 
 
 
 
 
 
 
 
Basis spread on variable rate
 
 
 
 
 
 
 
 
 
 
 
 
 
2.50% 
0.00% 
3.50% 
1.00% 
Short-term borrowings
 
 
 
 
 
 
 
 
0 
0 
 
 
 
 
 
 
 
Amount available under revolving credit facility
 
 
 
 
 
 
 
 
19,920,000 
 
 
 
 
 
 
 
 
Notes payable face amount
 
 
 
 
 
313,000 
 
 
 
 
 
 
 
 
 
 
 
Stated interest rate
 
 
 
 
 
5.00% 
 
 
 
 
 
 
 
 
 
 
 
Notes payable
313,000 
 
313,000 
313,000 
313,000 
 
 
 
 
 
 
 
 
 
 
 
 
Interest costs incurred
87,000 
186,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest costs capitalized
$ 0 
$ 108,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NON-CONTROLLING INTERESTS - Ownership Interest in SSE Holdings (Details)
Mar. 30, 2016
Dec. 30, 2015
Noncontrolling Interest [Abstract]
 
 
Number of LLC Interests held by Shake Shack Inc.
21,700,184 
19,789,259 
Number of LLC Interests held by Shake Shack Inc. (as a percentage)
59.80% 
54.60% 
Number of LLC Interests held by non-controlling interest holders
14,582,886 
16,460,741 
Number of LLC Interests held by non-controlling interest holders (as a percentage)
40.20% 
45.40% 
Total LLC Interests outstanding
36,283,070 
36,250,000 
Total LLC Interests outstanding (as a percentage)
100.00% 
100.00% 
NON-CONTROLLING INTERESTS - Narrative (Details)
0 Months Ended 1 Months Ended 3 Months Ended
Feb. 4, 2015
Feb. 28, 2015
Mar. 30, 2016
Apr. 1, 2015
Noncontrolling Interest [Line Items]
 
 
 
 
Non-controlling interest holders' weighted average ownership percentage
 
 
43.90% 
66.70% 
Units purchased during the period (in shares)
 
5,750,000 
 
 
Units acquired during the period (in shares)
5,968,841 
 
1,910,925 
 
LLC interests issued for share-based compensation (in shares)
339,306 
 
 
 
Class A Common Stock |
Common stock
 
 
 
 
Noncontrolling Interest [Line Items]
 
 
 
 
Issuance of class A common stock in settlement of unit appreciation rights (in shares)
339,306 
 
 
 
Limited Liability Company
 
 
 
 
Noncontrolling Interest [Line Items]
 
 
 
 
Number of units redeemed (in shares)
 
 
1,877,855 
0 
Redemption or Exchange of Units
 
 
 
 
Noncontrolling Interest [Line Items]
 
 
 
 
Units acquired during the period (in shares)
 
 
1,877,855 
 
Employee Stock Option
 
 
 
 
Noncontrolling Interest [Line Items]
 
 
 
 
Units acquired during the period (in shares)
 
 
33,070 
0 
NON-CONTROLLING INTERESTS - Changes in Ownership Interests in SSE Holdings (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 30, 2016
Apr. 1, 2015
Noncontrolling Interest [Line Items]
 
 
Comprehensive income (loss) attributable to Shake Shack Inc.
$ 1,461 
$ (12,668)
Total effect of changes in ownership interest on equity attributable to Shake Shack Inc.
7,379 
(86,863)
Deferred Compensation, Share-based Payments
 
 
Noncontrolling Interest [Line Items]
 
 
Increase (decrease) in additional paid-in capital
(1,060)
0 
IPO
 
 
Noncontrolling Interest [Line Items]
 
 
Increase (decrease) in additional paid-in capital
0 
(75,182)
Redemption or Exchange of Units
 
 
Noncontrolling Interest [Line Items]
 
 
Increase (decrease) in additional paid-in capital
4,642 
0 
Unit appreciation rights
 
 
Noncontrolling Interest [Line Items]
 
 
Increase (decrease) in additional paid-in capital
0 
987 
Employee Stock Option
 
 
Noncontrolling Interest [Line Items]
 
 
Increase (decrease) in additional paid-in capital
$ 216 
$ 0 
EQUITY-BASED COMPENSATION - Schedule of compensation expense recognized (Details) (USD $)
3 Months Ended
Mar. 30, 2016
Apr. 1, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Equity-based compensation expense
$ 1,030,000 
$ 13,159,000 
Total income tax benefit recognized related to equity-based compensation
31,000 
267,000 
Unit appreciation rights
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Equity-based compensation expense
0 
11,762,000 
Restricted Class B units
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Equity-based compensation expense
0 
605,000 
Stock options
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Equity-based compensation expense
$ 1,030,000 
$ 792,000 
EQUITY-BASED COMPENSATION (Narrative) (Details) (USD $)
3 Months Ended 3 Months Ended 1 Months Ended 1 Months Ended 0 Months Ended 3 Months Ended 0 Months Ended
Mar. 30, 2016
Apr. 1, 2015
Mar. 30, 2016
Unit appreciation rights
Apr. 1, 2015
Unit appreciation rights
Mar. 30, 2016
Restricted Class B units
Apr. 1, 2015
Restricted Class B units
Dec. 30, 2015
Restricted Class B units
Mar. 30, 2016
Stock options
Apr. 1, 2015
Stock options
Feb. 3, 2015
Minimum
Restricted Class B units
Feb. 3, 2015
Maximum
Restricted Class B units
Jan. 31, 2015
2015 Incentive Award Plan
Jan. 31, 2015
2015 Incentive Award Plan
Minimum
Stock options
Jan. 31, 2015
2015 Incentive Award Plan
Maximum
Stock options
Feb. 4, 2015
Common stock
Class A Common Stock
Mar. 30, 2016
2015 Incentive Award Plan
Dec. 30, 2015
2015 Incentive Award Plan
Mar. 30, 2016
2015 Incentive Award Plan
Stock options
Feb. 4, 2015
Unit Appreciation Rights Plan
Unit appreciation rights
Mar. 30, 2016
Unit Appreciation Rights Plan
Unit appreciation rights
Dec. 30, 2015
Unit Appreciation Rights Plan
Unit appreciation rights
Feb. 3, 2015
Unit Appreciation Rights Plan
Unit appreciation rights
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares available for grant (in shares)
 
 
 
 
 
 
 
 
 
 
 
5,865,522 
 
 
 
 
 
 
 
 
 
31,303 
Issuance of class A common stock in settlement of unit appreciation rights (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
339,306 
 
 
 
 
 
 
 
Unit appreciation rights vested and settled (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22,554 
 
 
 
Equity-based compensation expense
$ 1,030,000 
$ 13,159,000 
$ 0 
$ 11,762,000 
$ 0 
$ 605,000 
 
$ 1,030,000 
$ 792,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock options outstanding (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,525,375 
2,574,981 
 
 
0 
0 
 
Award vesting period
 
 
 
 
 
 
 
 
 
3 years 
5 years 
 
1 year 
5 years 
 
 
 
 
 
 
 
 
Restricted class B stock outstanding
 
 
 
 
0 
 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Options exercisable (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
523,915 
 
 
 
 
 
 
Unrecognized compensation expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 15,396,000 
 
 
 
 
 
 
Weighted-average compensation expense not recognized
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3 years 10 months 
 
 
 
 
EQUITY-BASED COMPENSATION - Schedule of Stock Options (Details) (2015 Incentive Award Plan, USD $)
3 Months Ended
Mar. 30, 2016
2015 Incentive Award Plan
 
Stock Options
 
Outstanding at beginning of period
2,574,981 
Granted
0 
Exercised
(38,081)
Forfeited
(11,525)
Outstanding at end of period
2,525,375 
Weighted Average Exercise Price
 
Outstanding at beginning of period (in USD per share)
$ 21.00 
Granted (in USD per share)
$ 0.00 
Exercised (in USD per share)
$ 21.00 
Forfeited (in USD per share)
$ (21.00)
Outstanding at end of period (in USD per share)
$ 21.00 
INCOME TAXES - Reconciliation of Income Tax Expense (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 30, 2016
Apr. 1, 2015
Income Tax Disclosure [Abstract]
 
 
Expected U.S. federal income taxes at statutory rate
34.00% 
34.00% 
Income taxes at U.S. federal statutory rate
$ 1,581 
$ (3,749)
State and local income taxes, net of federal benefit
272 
(149)
Foreign withholding taxes
240 
116 
Non-deductible expenses
0 
235 
Tax credits
(39)
0 
Non-controlling interest
(755)
3,780 
Other
0 
0 
Income tax expense
$ 1,299 
$ 233 
INCOME TAXES - Narrative (Details) (USD $)
0 Months Ended 3 Months Ended
Feb. 4, 2015
Mar. 30, 2016
Apr. 1, 2015
Dec. 30, 2015
Income Tax Contingency [Line Items]
 
 
 
 
Effective income tax rate reconciliation (in percentage)
 
27.90% 
(2.10%)
 
Units acquired during the period (in shares)
5,968,841 
1,910,925 
 
 
Deferred tax asset recognized as a result of investment in partnership
 
$ 23,383,000 
 
 
Deferred tax asset, investment in partnership
 
177,754,000 
 
 
Valuation allowance, deferred tax asset
 
20,309,000 
 
 
Deferred tax asset related to additional tax basis
 
14,023,000 
 
 
Deferred tax assets, tax receivable agreement
 
83,698,000 
 
 
Uncertain tax positions
 
0 
 
 
Percentage of tax benefits due to equity owners
 
85.00% 
 
 
Percentage of tax benefits expected to be realized
 
15.00% 
 
 
Establishment of liabilities under tax receivable agreement
 
34,920,000 
5,600,000 
 
Liabilities under tax receivable agreement
 
208,010,000 
 
173,090,000 
Current portion of liabilities under tax receivable agreement
 
$ 2,159,000 
 
$ 2,157,000 
Redemption or Exchange of Units
 
 
 
 
Income Tax Contingency [Line Items]
 
 
 
 
Units acquired during the period (in shares)
 
1,877,855 
 
 
EARNINGS PER SHARE - Schedule of Earnings Per Share (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 30, 2016
Apr. 1, 2015
Numerator:
 
 
Net income (loss)
$ 3,351 
$ (11,260)
Less: net income attributable to non-controlling interests
1,889 
1,408 
Net income (loss) attributable to Shake Shack Inc.
$ 1,462 
$ (12,668)
Denominator:
 
 
Weighted-average shares of Class A common stock outstanding—basic (in shares)
20,353 
11,953 
Effect of dilutive securities:
 
 
Weighted-average shares of Class A common stock outstanding—diluted (in shares)
20,812 
11,953 
Earnings per share of Class A common stock—basic (in dollars per share)
$ 0.07 
$ (1.06)
Earnings per share of Class A common stock—diluted (in dollars per share)
$ 0.07 
$ (1.06)
Stock options
 
 
Effect of dilutive securities:
 
 
Stock options (in shares)
459 
0 
EARNINGS PER SHARE - Antidilutive Securities (Details)
3 Months Ended
Mar. 30, 2016
Apr. 1, 2015
Stock options
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Antidilutive shares (in shares)
0 
2,618,281 
Common Class B
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Antidilutive shares (in shares)
14,582,886 
24,191,853 
SUPPLEMENTAL CASH FLOW INFORMATION (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 30, 2016
Apr. 1, 2015
Cash paid for:
 
 
Income taxes, net of refunds
$ 475 
$ 49 
Interest, net of amounts capitalized
15 
149 
Non-cash investing activities:
 
 
Accrued purchases of property and equipment
3,133 
3,088 
Capitalized equity-based compensation
30 
0 
Non-cash financing activities:
 
 
Establishment of liabilities under tax receivable agreement
34,920 
5,600 
IPO and Organizational Transaction |
Class A Common Stock
 
 
Non-cash investing activities:
 
 
Class A common stock issued
0 
6 
IPO and Organizational Transaction |
Class B Common Stock
 
 
Non-cash financing activities:
 
 
Cancellation of Class B common stock
0 
(6)
Redemption or Exchange of Units |
Class A Common Stock
 
 
Non-cash investing activities:
 
 
Class A common stock issued
2 
0 
Redemption or Exchange of Units |
Class B Common Stock
 
 
Non-cash financing activities:
 
 
Cancellation of Class B common stock
$ (2)
$ 0 
COMMITMENTS AND CONTINGENCIES (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 1 Months Ended 3 Months Ended
Mar. 30, 2016
Apr. 1, 2015
Dec. 30, 2015
Nov. 30, 2015
Exempt Classification Matter
manager
Mar. 30, 2016
Exempt Classification Matter
Mar. 30, 2016
Letter of credit
Mar. 30, 2016
Retail site
Dec. 31, 2013
Office building
Loss Contingencies [Line Items]
 
 
 
 
 
 
 
 
Letters of credit outstanding
 
 
 
 
 
 
$ 160 
$ 80 
Renewal term
 
 
 
 
 
1 year 
 
 
Number of former Shake Shack managers
 
 
 
2 
 
 
 
 
Settlement amount
 
 
 
750 
 
 
 
 
Amount of loss accrued
 
 
 
 
770 
 
 
 
Percentage of tax benefits due to equity owners
85.00% 
 
 
 
 
 
 
 
Establishment of liabilities under tax receivable agreement
34,920 
5,600 
 
 
 
 
 
 
Tax receivable agreement liability
$ 208,010 
 
$ 173,090 
 
 
 
 
 
RELATED PARTY TRANSACTIONS (Details) (USD $)
3 Months Ended
Mar. 30, 2016
Apr. 1, 2015
Dec. 30, 2015
Related Party Transaction [Line Items]
 
 
 
Percentage of tax benefits due to equity owners
85.00% 
 
 
Payments for tax receivable agreement
$ 0 
$ 0 
 
Tax receivable agreement liability
208,010,000 
 
173,090,000 
USHG
 
 
 
Related Party Transaction [Line Items]
 
 
 
Amount paid to USHG for general corporate expenses
6,000 
65,000 
 
Amounts due to related parties
0 
 
2,000 
Due from related parties, current
36,000 
 
0 
USHG |
Self insurance health care expense
 
 
 
Related Party Transaction [Line Items]
 
 
 
Expenses from transactions with related party
0 
146,000 
 
Hudson Yards Sports and Entertainment
 
 
 
Related Party Transaction [Line Items]
 
 
 
Number of renewal terms
5 
 
 
Renewal option period
5 years 
 
 
Hudson Yards Sports and Entertainment |
Concession income
 
 
 
Related Party Transaction [Line Items]
 
 
 
Due from related parties, current
4,000 
 
0 
Revenue from related parties
0 
0 
 
Madison Square Park Conservancy |
Rent expense
 
 
 
Related Party Transaction [Line Items]
 
 
 
Expenses from transactions with related party
195,000 
0 
 
Due to MSP conservancy
$ 0 
 
$ 17,000 
SUBSEQUENT EVENTS (Details) (Notes payable, Subsequent Event, USD $)
In Thousands, unless otherwise specified
0 Months Ended
Mar. 31, 2016
Notes payable |
Subsequent Event
 
Debt Instrument [Line Items]
 
Outstanding balance of promissory note repayment
$ 313