SHAKE SHACK INC., 10-K filed on 3/30/2016
Annual Report
Document and Entity Information Document (USD $)
12 Months Ended
Dec. 30, 2015
Jul. 1, 2015
Mar. 16, 2016
Class A Common Stock
Mar. 16, 2016
Class B Common Stock
Document Information [Line Items]
 
 
 
 
Document type
10-K 
 
 
 
Amendment flag
false 
 
 
 
Document period end date
Dec. 30, 2015 
 
 
 
Document fiscal year focus
2015 
 
 
 
Document fiscal period focus
Q4 
 
 
 
Entity registrant name
Shake Shack Inc. 
 
 
 
Entity central index key
0001620533 
 
 
 
Current fiscal year end date
--12-30 
 
 
 
Entity filer category
Non-accelerated Filer 
 
 
 
Entity current reporting status
Yes 
 
 
 
Entity common stock, shares outstanding
 
 
20,982,881 
15,272,474 
Entity Public Float
 
$ 355,714,785 
 
 
Entity Well-known Seasoned Issuer
No 
 
 
 
Entity Voluntary Filers
No 
 
 
 
CONSOLIDATED BALANCE SHEETS (USD $)
Dec. 30, 2015
Dec. 31, 2014
Current assets:
 
 
Cash and cash equivalents
$ 70,849,000 
$ 2,677,000 
Accounts receivable
4,217,000 
3,278,000 
Inventories
543,000 
529,000 
Prepaid expenses and other current assets
3,325,000 
1,441,000 
Total current assets
78,934,000 
7,925,000 
Property and equipment, net
93,041,000 
70,124,000 
Deferred income taxes, net
201,957,000 
161,000 
Other assets
5,615,000 
4,752,000 
TOTAL ASSETS
379,547,000 
82,962,000 
Current liabilities:
 
 
Short-term borrowings
0 
32,000,000 
Accounts payable
6,786,000 
6,440,000 
Accrued expenses
6,801,000 
5,578,000 
Accrued wages and related liabilities
5,804,000 
2,410,000 
Other current liabilities
4,614,000 
1,749,000 
Total current liabilities
24,005,000 
48,177,000 
Long-term debt
313,000 
313,000 
Deferred rent
22,927,000 
17,853,000 
Liabilities under tax receivable agreement, net of current portion
170,933,000 
0 
Other long-term liabilities
4,350,000 
4,019,000 
Total liabilities
222,528,000 
70,362,000 
Commitments and contingencies
   
   
Stockholders' / members' equity:
 
 
Members' equity
 
12,600,000 
Preferred stock, no par value—10,000,000 shares authorized; none issued and outstanding as of December 30, 2015
0 
 
Common stock
 
0 
Additional paid-in capital
96,311,000 
 
Retained earnings
4,273,000 
 
Accumulated other comprehensive loss
(5,000)
 
Total stockholders' equity attributable to Shake Shack Inc. / members' equity
100,615,000 
12,600,000 
Non-controlling interests
56,404,000 
 
Total equity
157,019,000 
12,600,000 
TOTAL LIABILITIES AND STOCKHOLDERS' / MEMBERS' EQUITY
379,547,000 
82,962,000 
Class A Common Stock
 
 
Stockholders' / members' equity:
 
 
Common stock
20,000 
 
Class B Common Stock
 
 
Stockholders' / members' equity:
 
 
Common stock
$ 16,000 
 
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
Dec. 30, 2015
Feb. 4, 2015
Dec. 31, 2014
Preferred stock, par value (in dollars per share)
$ 0 
 
 
Preferred stock, shares authorized
10,000,000 
10,000,000 
 
Preferred stock, shares issued
0 
 
 
Preferred stock, shares outstanding
0 
 
 
Common stock par value (in dollars per share)
 
 
$ 0.01 
Common stock, shares authorized
 
 
100 
Common stock, shares, issued
 
 
0 
Common stock, shares, outstanding
 
 
0 
Class A Common Stock
 
 
 
Common stock par value (in dollars per share)
$ 0.001 
$ 0.001 
 
Common stock, shares authorized
200,000,000 
200,000,000 
 
Common stock, shares, issued
19,789,259 
 
 
Common stock, shares, outstanding
19,789,259 
 
 
Class B Common Stock
 
 
 
Common stock par value (in dollars per share)
$ 0.001 
$ 0.001 
 
Common stock, shares authorized
35,000,000 
35,000,000 
 
Common stock, shares, issued
16,460,741 
 
 
Common stock, shares, outstanding
16,460,741 
 
 
CONSOLIDATED STATEMENT OF INCOME (LOSS) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Shack sales
$ 183,219 
$ 112,042 
$ 78,587 
Licensing revenue
7,373 
6,488 
3,869 
TOTAL REVENUE
190,592 
118,530 
82,456 
Shack-level operating expenses:
 
 
 
Food and paper costs
54,079 
34,925 
23,865 
Labor and related expenses
44,752 
29,312 
20,096 
Other operating expenses
16,307 
11,191 
7,315 
Occupancy and related expenses
15,207 
9,753 
6,892 
General and administrative expenses
37,825 
18,187 
12,453 
Depreciation expense
10,222 
5,809 
3,541 
Pre-opening costs
5,430 
6,105 
2,334 
Loss on disposal of property and equipment
17 
105 
25 
TOTAL EXPENSES
183,839 
115,387 
76,521 
OPERATING INCOME
6,753 
3,143 
5,935 
Interest expense, net
325 
363 
52 
INCOME BEFORE INCOME TAXES
6,428 
2,780 
5,883 
Income tax expense
3,304 
662 
460 
NET INCOME
3,124 
2,118 
5,423 
Less: net income attributable to non-controlling interests
11,900 
0 
0 
NET INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.
(8,776)
2,118 
5,423 
Earnings (loss) per share of Class A common stock
 
 
 
Basic (in dollars per share)
$ (0.65)1
$ 0.07 1
$ 0.18 1
Diluted (in dollars per share)
$ (0.65)1
$ 0.07 1
$ 0.18 1
Weighted-average shares of Class A common stock outstanding
 
 
 
Basic (shares)
13,588 1
29,977 1
29,934 1
Diluted (shares)
13,588 1
30,122 1
30,018 1
Pro forma earnings per share of Class A common stock
 
 
 
Basic (in dollars per share)
$ 0.11 2
 
 
Diluted (in dollars per share)
$ 0.10 2
 
 
Pro forma
 
 
 
Shack-level operating expenses:
 
 
 
Income tax expense
1,786 2
 
 
NET INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.
$ 1,451 2
 
 
CONSOLIDATED STATEMENT OF INCOME (LOSS) - PARENTHETICAL (Class A Common Stock, Common stock)
0 Months Ended
Feb. 4, 2015
Shares issued during the period
5,968,841 
Issuance of class A common stock in settlement of unit appreciation rights (shares)
339,306 
IPO
 
Shares issued during the period
5,750,000 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Statement of Comprehensive Income [Abstract]
 
 
 
Net income
$ 3,124 
$ 2,118 
$ 5,423 
Other comprehensive loss
 
 
 
Unrealized holding losses on available-for-sale securities
(11)
0 
0 
Income tax benefit
0 
0 
0 
OTHER COMPREHENSIVE LOSS, NET OF TAX
(11)
0 
0 
COMPREHENSIVE INCOME
3,113 
2,118 
5,423 
Less: comprehensive loss attributable to non-controlling interests
(6)
0 
0 
COMPREHENSIVE INCOME ATTRIBUTABLE TO SHAKE SHACK INC.
$ 3,119 
$ 2,118 
$ 5,423 
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' AND MEMBERS' EQUITY (USD $)
In Thousands, except Share data, unless otherwise specified
Total
USD ($)
Class A Common Stock
Class B Common Stock
Members' Equity
USD ($)
Common stock
Class A Common Stock
USD ($)
Common stock
Class B Common Stock
USD ($)
Additional Paid-In Capital
USD ($)
Retained Earnings
USD ($)
Accumulated Other Comprehensive Loss
USD ($)
Non- Controlling Interest
USD ($)
Secondary Offering and Redemption of Units
USD ($)
Secondary Offering and Redemption of Units
Common stock
Class A Common Stock
USD ($)
Secondary Offering and Redemption of Units
Common stock
Class B Common Stock
USD ($)
Secondary Offering and Redemption of Units
Additional Paid-In Capital
USD ($)
Secondary Offering and Redemption of Units
Non- Controlling Interest
USD ($)
USC Merger
USD ($)
USC Merger
Common stock
Class A Common Stock
USD ($)
USC Merger
Common stock
Class B Common Stock
USD ($)
USC Merger
Additional Paid-In Capital
USD ($)
USC Merger
Non- Controlling Interest
USD ($)
Beginning balance at Dec. 26, 2012
$ 31,871 
 
 
$ 31,871 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
5,423 
 
 
5,423 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity-based compensation
93 
 
 
93 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive loss
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance at Dec. 25, 2013
37,387 
 
 
37,387 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
2,118 
 
 
2,118 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity-based compensation
165 
 
 
165 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Member distributions
(27,070)
 
 
(27,070)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive loss
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance at Dec. 31, 2014
12,600 
 
 
12,600 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance (shares) at Dec. 31, 2014
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
(13,049)
 
 
(13,049)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity-based compensation
7,731 
 
 
7,731 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Member distributions
(11,125)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance at Feb. 03, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance at Dec. 31, 2014
12,600 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance (shares) at Dec. 31, 2014
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
3,124 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issuance of class A common stock in settlement of unit appreciation rights (shares)
 
 
 
 
339,306 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive loss
(11)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance at Dec. 30, 2015
157,019 
 
 
 
20 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance (shares) at Dec. 30, 2015
 
19,789,259 
16,460,741 
 
19,789,259 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance at Feb. 03, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
16,173 
 
 
 
 
 
 
4,273 
 
11,900 
 
 
 
 
 
 
 
 
 
 
Shares issued during the period
 
 
 
 
5,750,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Class A common stock issued in connection with the USC Merger
109,262 
 
 
 
6 
 
109,256 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issuance of class A common stock in settlement of unit appreciation rights (shares)
 
 
 
 
339,306 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issuance of Class A common stock in settlement of unit appreciation rights
0 
 
 
 
 
 
987 
 
 
(987)
 
 
 
 
 
 
 
 
 
 
Effect of organizational transactions (shares)
 
 
 
 
5,968,841 
24,191,853 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effect of the Organizational Transactions
30 
 
 
3,843 
6 
24 
(75,182)
 
 
71,339 
 
 
 
 
 
 
 
 
 
 
Equity-based compensation
4,314 
 
 
 
 
 
4,314 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred tax adjustments related to Tax Receivable Agreement
31,094 
 
 
 
 
 
31,094 
 
 
 
 
 
 
 
 
 
 
 
 
 
Redemptions (shares)
 
 
 
 
 
 
 
 
 
 
 
6,003,308 
(6,003,308)
 
 
 
1,727,804 
(1,727,804)
 
 
Redemption of LLC Interests in connection with the secondary offering
 
 
 
 
 
 
 
 
 
 
0 
6 
(6)
19,934 
(19,934)
0 
2 
(2)
5,908 
(5,908)
Other comprehensive loss
(11)
 
 
 
 
 
 
 
(5)
(6)
 
 
 
 
 
 
 
 
 
 
Ending balance at Dec. 30, 2015
157,019 
 
 
 
20 
16 
96,311 
4,273 
(5)
56,404 
 
 
 
 
 
 
 
 
 
 
Ending balance (shares) at Dec. 30, 2015
 
19,789,259 
16,460,741 
 
19,789,259 
16,460,741 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance at Aug. 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Redemptions (shares)
 
 
 
 
2,848,035 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effect of redemption (shares)
 
 
 
 
 
2,848,035 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance at Dec. 30, 2015
 
 
 
 
$ 20 
$ 16 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance (shares) at Dec. 30, 2015
 
19,789,259 
16,460,741 
 
19,789,259 
16,460,741 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance at Nov. 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares issued during the period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,727,804 
 
 
 
Effect of redemption (shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,727,804 
 
 
Ending balance (shares) at Dec. 30, 2015
 
19,789,259 
16,460,741 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
OPERATING ACTIVITIES
 
 
 
Net income (including amounts attributable to non-controlling interests)
$ 3,124 
$ 2,118 
$ 5,423 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation expense
10,222 
5,809 
3,541 
Equity-based compensation
16,681 
165 
93 
Non-cash interest expense
273 
192 
37 
Loss on disposal of property and equipment
17 
105 
25 
Deferred income taxes
(734)
(93)
7 
Changes in operating assets and liabilities:
 
 
 
Accounts receivable
775 
(1,751)
26 
Inventories
(14)
(198)
(88)
Prepaid expenses and other current assets
(958)
(1,168)
(118)
Other assets
1,293 
(2,461)
(1,109)
Accounts payable
201 
1,210 
1,219 
Accrued expenses
2,548 
3,349 
(713)
Accrued wages and related liabilities
3,394 
416 
866 
Other current liabilities
257 
420 
31 
Deferred rent
4,363 
5,206 
1,742 
Other long-term liabilities
(184)
265 
1,942 
NET CASH PROVIDED BY OPERATING ACTIVITIES
41,258 
13,584 
12,924 
INVESTING ACTIVITIES
 
 
 
Purchases of marketable securities
(2,397)
0 
0 
Purchases of property and equipment
(32,117)
(28,515)
(16,194)
NET CASH USED IN INVESTING ACTIVITIES
(34,514)
(28,515)
(16,194)
FINANCING ACTIVITIES
 
 
 
Promissory note
0 
0 
313 
Proceeds from revolving credit facility
4,000 
32,000 
0 
Payments on revolving credit facility
(36,000)
0 
0 
Deferred financing costs
(103)
(398)
0 
Proceeds from issuance of Class A common stock sold in initial public offering, net of underwriting discounts, commissions and offering costs
109,262 
0 
0 
Proceeds from issuance of Class B common stock
30 
0 
0 
Member distributions
(11,125)
(27,070)
0 
Employee withholding taxes related to net settled equity awards
(4,636)
0 
0 
NET CASH PROVIDED BY FINANCING ACTIVITIES
61,428 
4,532 
313 
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
68,172 
(10,399)
(2,957)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
2,677 
13,076 
16,033 
CASH AND CASH EQUIVALENTS AT END OF PERIOD
$ 70,849 
$ 2,677 
$ 13,076 
NATURE OF OPERATIONS
NATURE OF OPERATIONS
NATURE OF OPERATIONS
 
Shake Shack Inc. 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. Unless the context otherwise requires, references to "we," "us," "our," "Shake Shack" and the "Company" refer to Shake Shack Inc. and 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 December 30, 2015, there were 84 Shacks in operation, system-wide, of which 44 were domestic company-operated Shacks, five were domestic licensed Shacks and 35 were international licensed Shacks.
Initial Public Offering
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, which includes 750,000 shares issued pursuant to the underwriters' over-allotment option. We received $112,298 in proceeds, net of underwriting discounts and commissions, which we used to purchase newly-issued membership interests from SSE Holdings at a price per interest equal to the initial public offering price of our Class A common stock.
Organizational Transactions
In connection with the IPO, we completed the following transactions (the "Organizational Transactions"):
▪
We amended and restated the limited liability company agreement of SSE Holdings ("LLC Agreement") to, among other things, (i) provide for a new single class of common membership interests in SSE Holdings ("LLC Interests"), (ii) exchange all of the membership interests of the then-existing holders of SSE Holdings' membership interests ("Original SSE Equity Owners") for LLC Interests and (iii) appoint Shake Shack as the sole managing member of SSE Holdings. See Note 11.
▪
We amended and restated our certificate of incorporation to, among other things, (i) provide for Class B common stock with voting rights but no economic interests (where "economic interests" means the right to receive any distributions or dividends, whether cash or stock, in connection with common stock) and (ii) issue shares of Class B common stock to the Original SSE Equity Owners on a one -to-one basis with the number of LLC Interests they own. See Note 11.
▪
We acquired, by merger, two entities that were owned by former indirect members of SSE Holdings ("Former SSE Equity Owners"), for which we issued 5,968,841 shares of Class A common stock as merger consideration (the "Mergers"). The only assets held by the two merged entities prior to the merger were 5,968,841 LLC Interests and a corresponding number of shares of Class B common stock. Upon consummation of the Mergers, we canceled the 5,968,841 shares of Class B common stock and recognized the 5,968,841 of LLC Interests at carrying value, as the Mergers are considered to be transactions between entities under common control.
Following the completion of the Organizational Transactions, we owned 33.3% of SSE Holdings. The SSE Holdings members subsequent to the Merger (the "Continuing SSE Equity Owners") owned the remaining 66.7% of SSE Holdings. As a result of the Organizational Transactions, we became the sole managing member of SSE Holdings and, although we had a minority economic interest in SSE Holdings, we had the sole voting power in, and control the management of, SSE Holdings. Accordingly, we consolidated the financial results of SSE Holdings and reported a non-controlling interest in our consolidated financial statements.
As the Organizational Transactions are considered transactions between entities under common control, the financial statements for periods prior to the IPO and Organizational Transactions have been adjusted to combine the previously separate entities for presentation purposes.
Secondary Offering
In August 2015, we completed a secondary offering of 4,000,000 shares of our Class A common stock at a price of $60.00 per share. All of the shares sold in the offering were offered by affiliates of the Former SSE Equity Owners and certain of the Continuing SSE Equity Owners (the "Selling Stockholders"). We did not receive any proceeds from the sale of shares of Class A common stock offered by the Selling Stockholders. The shares sold in the offering consisted of (i) 844,727 existing shares of Class A common stock held by the Former SSE Equity Owners and (ii) 3,155,273 newly-issued shares of Class A common stock issued in connection with the redemption of 3,155,273 LLC Interests by the Continuing SSE Equity Owners that participated in the offering. Simultaneously, and in connection with the redemption, 3,155,273 shares of Class B common stock were surrendered by the Continuing SSE Equity Owners and canceled. Additionally, in connection with the redemption, we received 3,155,273 LLC Interests, increasing our total ownership interest in SSE Holdings.
USC Merger
Pursuant to a Stockholders Agreement, dated as of February 4, 2015, as amended, by and among Daniel H. Meyer and his affiliates (the "Meyer Group") and other parties thereto, the Meyer Group has the right to cause all of the stock of Union Square Cafe Corp. ("USC") and Gramercy Tavern Corp. ('GT') to be converted into and exchanged for shares of our Class A common stock pursuant to a tax-free reorganization (each, a "Reorganization"). In December 2015, the Meyer Group exercised their right with respect to USC. The Reorganization was structured as a two-step merger, whereby (i) a newly-formed wholly-owned subsidiary of the Company merged with and into USC, then (ii) USC merged with and into the Company (the foregoing transactions are collectively referred to as the "USC Merger"). Prior to the USC Merger, USC owned 1,727,804 LLC Interests and an equivalent number of shares of our Class B common stock. In the USC Merger, (i) 1,727,804 shares of Class A common stock were issued to the stockholders of USC, with each stockholder receiving newly-issued shares of Class A common stock in an amount equivalent to the number of shares of USC held by such stockholders; (ii) 1,727,804 shares of Class B common stock held by USC were cancelled; and (iii) 1,727,804 LLC Interests held by USC were transferred to us.
As of December 30, 2015, we owned 54.6% of SSE Holdings and the Continuing SSE Equity Owners own the remaining 45.4% of SSE Holdings.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include our accounts and the accounts of our subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior period amounts to conform to the current year presentation.
Fiscal Year
We operate on a 52/53 week fiscal year ending on the last Wednesday in December. Fiscal year 2015 contained 52 weeks and ended on December 30, 2015. Fiscal year 2014 contained 53 weeks and ended on December 31, 2014. Fiscal year 2013 contained 52 weeks ended on and December 25, 2013. Unless otherwise stated, references to years in this report relate to fiscal years.
Use of Estimates
The preparation of these consolidated financial statements in conformity with U.S. GAAP requires management 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.
Segment Reporting
We own and operate Shacks in the United States. We also have domestic and international licensed operations. Our chief operating decision maker (the "CODM") is our Chief Executive Officer. As the CODM reviews financial performance and allocates resources at a consolidated level on a recurring basis, we have one operating segment and one reportable segment.
Fair Value Measurements
We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, we assume the highest and best use of the asset by market participants in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions, and credit risk.
Assets and liabilities are classified using a fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
*
Level 1 - Quoted prices in active markets for identical assets or liabilities
*
Level 2 - Observable inputs other than quoted prices in active markets for identical assets or liabilities, quoted prices for identical assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities
*
Level 3 - Inputs that are both unobservable and significant to the overall fair value measurements reflecting an entity's estimates of assumptions that market participants would use in pricing the asset or liability
Cash and Cash Equivalents
Cash and cash equivalents consist primarily of cash on hand, deposits with banks, and short-term, highly liquid investments that have original maturities of three months or less. Cash equivalents are stated at cost, which approximates fair value. Cash equivalents consist primarily of money market funds.
Accounts Receivable
Accounts receivable consist primarily of receivables from landlords for tenant improvement allowances, receivables from our licensees for licensing revenue and related reimbursements, credit card receivables and vendor rebates. We evaluate the collectibility of our accounts receivable based on a variety of factors, including historical experience, current economic conditions and other factors.
Inventories
Inventories, which consist of food, beer, wine, other beverages and retail merchandise, are stated at the lower of cost or market with cost determined on a first-in, first-out basis. No adjustment is deemed necessary to reduce inventory to the lower of cost or market value due to the rapid turnover and high utilization of inventory.
Property and Equipment
Property and equipment is stated at historical cost less accumulated depreciation. Property and equipment is depreciated based on the straight-line method over the estimated useful lives of the assets, generally ranging from three to seven years for equipment, furniture and fixtures, and computer equipment and software. Leasehold improvements are depreciated over the shorter of their estimated useful life or the related lease life, generally ranging from 10 to 20 years. For leases with renewal periods at our option, we use the original lease term, excluding renewal option periods, to determine estimated useful lives.
Costs incurred when constructing Shacks are capitalized. The cost of repairs and maintenance are expensed when incurred. Costs for refurbishments and improvements that significantly increase the productive capacity or extend the useful life of the asset are capitalized. When assets are disposed of, the resulting gain or loss is recognized on the Consolidated Statements of Income (Loss).
We assess potential impairments to our long-lived assets, which includes property and equipment, whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of an asset is measured by a comparison of the carrying amount of an asset group to its estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset exceeds the fair value of the asset. There were no impairment charges recorded in fiscal 2015, 2014 and 2013.
Deferred Financing Costs
Deferred financing costs incurred in connection with the issuance of long-term debt and establishing credit facilities are capitalized and amortized to interest expense based on the related debt agreements. Deferred financing costs are included in other assets on the Consolidated Balance Sheets.
Other Assets
Other assets consist primarily of long-term marketable securities, security deposits, transferable liquor licenses and certain custom furniture pre-ordered for future Shacks and yet to be placed in service.
The costs of obtaining non-transferable liquor licenses that are directly issued by local government agencies for nominal fees are expensed as incurred. The costs of purchasing transferable liquor licenses through open markets in jurisdictions with a limited number of authorized liquor licenses are capitalized as indefinite-lived intangible assets. Annual liquor license renewal fees are expensed over the renewal term. As of December 30, 2015 and December 31, 2014, indefinite-lived intangible assets relating to transferable liquor licenses totaled $701. We evaluate our indefinite-lived intangible assets for impairment annually during our fiscal fourth quarter, and whenever events or changes in circumstances indicate that an impairment may exist. When evaluating other intangible assets for impairment, we may first perform a qualitative assessment to determine whether it is more likely than not that an intangible asset group is impaired. If we do not perform the qualitative assessment, or if we determine that it is not more likely than not that the fair value of the intangible asset group exceeds its carrying amount, we calculate the estimated fair value of the intangible asset group. If the carrying amount of the intangible asset group exceeds the estimated fair value, an impairment charge is recorded to reduce the carrying value to the estimated fair value. In addition, we continuously monitor and may revise our intangible asset useful lives if and when facts and circumstances change.
Equity-based Compensation
Equity-based compensation expense is measured based on fair value. We recognize compensation expense on a straight-line basis over the requisite service period. For awards with graded-vesting features and service conditions only, compensation expense is recognized on a straight-line basis over the total requisite service period for the entire award. Equity-based compensation expense is included within general and administrative expenses on the Consolidated Statements of Income (Loss).
Leases
We lease all of our domestic company-operated Shacks, our home office and certain equipment under various non-cancelable lease agreements that expire on various dates through 2032. Generally, our real estate leases have initial terms ranging from 10 to 20 years and typically include two five-year renewal options. At the inception of each lease, we determine its classification as an operating or capital lease. All of our leases are classified as operating leases and typically provide for fixed minimum rent payments and/or contingent rent payments based upon sales in excess of specified thresholds. When the achievement of such sales thresholds are deemed to be probable, contingent rent is accrued in proportion to the sales recognized during the period. For operating leases that include rent holidays and rent escalation clauses, we recognize rent expense on a straight-line basis over the lease term from the date we take possession of the leased property. The difference between the straight-line rent amounts and amounts payable under the lease agreements is recorded as deferred rent and is included as rent expense in occupancy and related expenses on the Consolidated Statements of Income (Loss). Rent expense incurred before a Shack opens is recorded in pre-opening costs. Once a domestic company-operated Shack opens, we record the straight-line rent expense and any contingent rent, if applicable, in occupancy and related expenses on the Consolidated Statements of Income (Loss).
Many of our leases also require us to pay real estate taxes, common area maintenance costs and other occupancy costs which are included in occupancy and related expenses on the Consolidated Statements of Income (Loss).
We expend cash for leasehold improvements to build out and equip our leased premises. We may also expend cash for structural additions made to leased premises. Generally, a portion of the leasehold improvements and building costs are reimbursed by our landlords as landlord incentives pursuant to agreed-upon terms in our lease agreements. If obtained, landlord incentives usually take the form of up-front cash, full or partial credits against our future minimum or contingent rents otherwise payable by us, or a combination thereof. When contractually due, we classify landlord incentives as deferred rent on the Consolidated Balance Sheets and amortize the landlord incentives on a straight-line basis over the lease term as a reduction of occupancy costs and related expenses or pre-opening costs on the Consolidated Statements of Income (Loss).
Revenue Recognition
Revenue consists of Shack sales and licensing revenue. Revenue from Shack sales are presented net of discounts and recognized when food and beverage products are sold. Sales tax collected from customers is excluded from Shack sales and the obligation is included in sales tax payable until the taxes are remitted to the appropriate taxing authorities. Revenue from our gift cards are deferred and recognized upon redemption. Licensing revenues include initial territory fees and ongoing licensing fees from all licensed Shacks. Initial territory fees are recorded as deferred revenue when received and proportionate amounts are recognized as revenue when a licensed Shack is opened and all material services and conditions related to the fee have been substantially performed. Ongoing licensing fees from these Shacks are based on a percentage of sales and are recognized as revenue as the fees are earned and become receivable from the licensee.
Income Taxes
We account for income taxes pursuant to the asset and liability method which requires the recognition of deferred income tax assets and liabilities related to the expected future tax consequences arising from temporary differences between the carrying amounts and tax bases of assets and liabilities based on enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse. Any effects of changes in income tax rates or laws are included in income tax expense in the period of enactment. A valuation allowance is recognized if we determine it is more likely than not that all or a portion of a deferred tax asset will not be recognized.
Pre-Opening Costs
Pre-opening costs are expensed as incurred and consist primarily of legal fees, occupancy, manager and employee wages, travel and related training costs incurred prior to the opening of a Shack.
Advertising
The cost of advertising and promotions are expensed as incurred. Advertising and promotions costs amounted to $1,646, $1,166 and $794 in fiscal 2015, 2014 and 2013, respectively, and are included in general and administrative expense and other operating expenses on the Consolidated Statements of Income (Loss).
Recently Adopted Accounting Pronouncements     
In November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2015-17, Balance Classification of Deferred Taxes ("ASU 2015-17"). ASU 2015-17 requires deferred tax liabilities and assets be classified as non-current in a classified statement of financial position. ASU 2015-17 is effective for reporting periods after December 15, 2016 and may be adopted either retrospectively or prospectively. Early adoption is permitted and we elected to early adopt this guidance as of December 30, 2015 and to apply the guidance retrospectively to all periods presented. Accordingly, we reclassified the prior period amount of $20 related to our deferred tax asset from current to non-current, resulting in an increase to the non-current deferred income tax asset for the same amount for that period. The application of this guidance affects classification only, and did not have a material effect on our consolidated financial position or results of operations. 
Recently Issued Accounting Pronouncements       
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 that this new standard 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 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. ASU 2015-05 is effective for reporting periods beginning after December 15, 2015 and may be adopted either retrospectively or prospectively. The adoption of ASU 2015-05 will not have a significant impact on our consolidated financial statements.
In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"). 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 2015-03 is effective for reporting periods beginning after December 15, 2015. The adoption of ASU 2015-03 will not have a significant impact on its consolidated financial statements.
In February 2015, the FASB issued Accounting Standards Update No. 2015-02, Consolidation ("ASU 2015-02"). 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. ASU 2015-02 is effective for reporting periods beginning after December 15, 2015. The adoption of ASU 2015-02 will not have a significant impact on its 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 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.
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 December 30, 2015 and December 31, 2014, and indicate the classification within the fair value hierarchy. Refer to Note 2 for further information.
Cash, Cash Equivalents and Marketable Securities
The following tables summarize our cash, cash equivalents and marketable securities by significant investment categories as of December 30, 2015:
 
 
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 December 30, 2015 have been in a continuous loss position for less than 12 months. There were no investments in marketable securities as of December 31, 2014. Interest income related to our available-for-sale securities of $7 was included in interest expense, net on the Consolidated Statement of Income (Loss) for fiscal 2015. There were no realized gains or losses on available-for-sale securities for fiscal 2015. Net unrealized losses on available-for-sale securities totaling $11 for fiscal 2015 were included in other comprehensive loss on the Consolidated Statement of Comprehensive Income.
The following table summarizes the estimated fair value of our investments in marketable debt securities, accounted for as available-for-sale securities and classified by the contractual maturity date of the securities:
 
December 30
2015

Due within one year
$
275

Due after one year through 5 years
2,111

Due after 5 years through 10 years
—

Due after 10 years
—

Total
$
2,386


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 December 30, 2015, the declines in the market value of our marketable securities investment portfolio are considered to be temporary in nature.
Other Financial Instruments
The carrying value of our financial instruments, including accounts receivable, accounts payable, and accrued expenses as of December 30, 2015 and December 31, 2014 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 2015, 2014 and 2013.
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE
 
The components of accounts receivable as of December 30, 2015 and December 31, 2014 are as follows:
 
December 30
2015

 
December 31
2014

Landlord receivables
$
1,380

 
$
1,088

Licensing receivables
1,669

 
822

Credit card receivables
1,023

 
660

Other receivables
145

 
708

Accounts receivable
$
4,217

 
$
3,278


As of December 30, 2015 and December 31, 2014, no allowance for doubtful accounts was recorded based on our evaluation of collectibility.
INVENTORIES
INVENTORIES
INVENTORIES
 
Inventories consisted of the following:
 
December 30
2015

 
December 31
2014

Food
$
328

 
$
354

Wine
30

 
28

Beer
46

 
33

Beverages
57

 
42

Retail merchandise
82

 
72

Inventories
$
543

 
$
529

PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT
 
Property and equipment consisted of the following:
 
December 30
2015

 
December 31
2014

Leasehold improvements
$
82,904

 
$
58,272

Equipment
16,903

 
12,108

Furniture and fixtures
4,965

 
3,249

Computer equipment and software
5,197

 
3,529

Construction in progress
6,591

 
6,309

Property and equipment, gross
116,560

 
83,467

Less: accumulated depreciation
(23,519
)
 
(13,343
)
Property and equipment, net
$
93,041

 
$
70,124


Depreciation expense was $10,222, $5,809 and $3,541 for fiscal 2015, 2014 and 2013, respectively.
SUPPLEMENTAL BALANCE SHEET INFORMATION
SUPPLEMENTAL BALANCE SHEET INFORMATION
SUPPLEMENTAL BALANCE SHEET INFORMATION
 
The components of other current liabilities as of December 30, 2015 and December 31, 2014 are as follows:
 
December 30
2015

 
December 31
2014

Sales tax payable
$
1,073

 
$
736

Current portion of liabilities under tax receivable agreement
2,157

 
—

Gift card liability
833

 
625

Other
551

 
388

Other current liabilities
$
4,614

 
$
1,749

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, the "Revolving Credit Facility"), that provides for a total revolving commitment of $20,000, which can be increased to $50,000 at our election. 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 December 31, 2014, amounts outstanding under the Revolving Credit Facility totaled $32,000, and were classified as short-term borrowings on the Consolidated Balance Sheet. During the fiscal year ended December 30, 2015, we borrowed an additional $4,000 in principal under the Revolving Credit Facility. In February 2015, we repaid the entire outstanding balance of $36,000 using a portion of the proceeds we received from our IPO and, as of December 30, 2015, there were no amounts outstanding under the Revolving Credit Facility. We had $19,920 of availability as of December 30, 2015, 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 December 30, 2015, we were in compliance with all covenants.
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 December 30, 2015 and December 31, 2014, the outstanding balance of the promissory note was $313.
Total interest costs incurred were $440, $365 and $56 in fiscal 2015, 2014 and 2013, respectively. During fiscal 2015, $108 was capitalized into property and equipment. No amounts were capitalized during fiscal 2014 and 2013.
LEASES
LEASES
LEASES
 
A summary of rent expense under operating lease agreements is as follows:
 
 
2015

 
2014

 
2013

Minimum rent
$
10,796

 
$
6,497

 
$
4,507

Deferred rent
1,482

 
2,830

 
975

Contingent rent
2,959

 
1,883

 
1,626

Total rent expense
$
15,237

 
$
11,210

 
$
7,108



The rent expense above does not include common area maintenance costs, real estate taxes and other occupancy costs, which were $2,119, $1,111 and $758 in fiscal 2015, 2014 and 2013, respectively.
As of December 30, 2015, future minimum lease payments under non-cancelable operating leases consisted of the following:
2016
$
14,199

2017
15,664

2018
16,329

2019
16,507

2020
15,982

Thereafter
97,415

Total minimum lease payments
$
176,096

EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS
 
Deferred Compensation
During fiscal 2013, we entered into an incentive bonus agreement with one of our executives, whereby the executive is entitled to receive a deferred compensation award in the amount of $2,450, payable by us in March 2018. In fiscal 2013, we recorded $2,054 of deferred compensation expense to recognize the present value of the incentive bonus liability, which is included in other long-term liabilities on the Consolidated Balance Sheet. The deferred compensation expense is included within general and administrative expense on the Consolidated Statement of Income (Loss). There was no such expense in fiscal 2015 or fiscal 2014. The difference between the present value of the bonus liability and the amount payable is accreted to interest expense over the remaining term until the incentive bonus becomes payable. In September 2015, we established a grantor trust, commonly referred to as a "rabbi trust," for the purpose of funding our deferred compensation obligation. We contributed $2,450 to the trust in October 2015. Assets held by the trust are subject to creditor claims in the event of insolvency, but are not available for general corporate purposes. As of December 30, 2015, amounts held by the trust were invested in various marketable securities classified as available-for-sale and recognized at fair value in prepaid expenses and other current assets and other assets on the Consolidated Balance Sheet. See Note 3.
Defined Contribution Plan
Our employees are eligible to participate in a defined contribution savings plan maintained by Union Square Hospitality Group, LLC, a related party. The plan is funded by employee and employer contributions. We pay our share of the employer contributions directly to the third party trustee. Employer contributions to the plan are at our discretion. Effective January 2014, we began making contributions matching a portion of participants' contributions. We match 100% of participants' contributions for the first 3% of eligible compensation contributed and 50% of contributions made in excess of 3% of eligible compensation up to 5% of eligible compensation. Employer contributions totaled $238 and $132 for fiscal 2015 and 2014, respectively. There were no contributions in fiscal 2013.
STOCKHOLDER'S EQUITY
STOCKHOLDER'S EQUITY
STOCKHOLDERS' EQUITY
 
Amendment and Restatement of Certificate of Incorporation
On February 4, 2015, we amended and restated our certificate of incorporation to, among other things, provide for the (i) authorization of 200,000,000 shares of Class A common stock with a par value of $0.001 per share; (ii) authorization of 35,000,000 shares of Class B common stock with a par value of $0.001 per share; (iii) authorization of 10,000,000 shares of undesignated preferred stock that may be issued from time to time by our Board of Directors in one or more series; and (iv) establishment of a classified board of directors, divided into three classes, each of whose members will serve for staggered three-year terms.
Holders of our Class A and Class B common stock are entitled to one vote per share and, except as otherwise required, will vote together as a single class on all matters on which stockholders generally are entitled to vote. Holders of our Class B common stock are not entitled to receive dividends and will not be entitled to receive any distributions upon the liquidation, dissolution or winding up of the Company. Shares of Class B common stock may only be issued to the extent necessary to maintain the one-to-one ratio between the number of LLC Interests held by the Continuing SSE Equity Owners and the number of shares of Class B common stock held by the Continuing SSE Equity Owners. Shares of Class B common stock are transferable only together with an equal number of LLC Interests. Shares of Class B common stock will be canceled on a one-for-one basis upon the redemption or exchange any of the outstanding LLC Interests.
We must, at all times, maintain a one-to-one ratio between the number of outstanding shares of Class A common stock and the number of LLC Interests owned by us (subject to certain exceptions for treasury shares and shares underlying certain convertible or exchangeable securities).
Initial Public Offering
As described in Note 1, on February 4, 2015, we completed an IPO of 5,750,000 shares of our Class A common stock at a public offering price of $21.00 per share, which includes 750,000 shares issued pursuant to the underwriters' over-allotment option. We received $112,298 in proceeds, net of underwriting discounts and commissions, which we used to purchase newly-issued LLC Interests from SSE Holdings at a price per interest equal to the initial public offering price of our Class A common stock.
In connection with our IPO, we issued 30,160,694 shares of Class B common stock to the Original SSE Equity Owners.
SSE Holdings Recapitalization
As described in Note 1, on February 4, 2015, we amended the SSE Holdings LLC Agreement to, among other things, (i) provide for a new single class of common membership interests in SSE Holdings, the LLC Interests, and (ii) exchange all of the then-existing membership interests of the Original SSE Equity Owners for LLC Interests.
The LLC Agreement also 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. Upon receipt of a redemption request, we may, instead, elect to effect a direct exchange of LLC Interests directly with the holder. Additionally, we may elect to settle any such redemption or exchange in shares of Class A common stock or in cash. In the event of cash settlement, we would issue new shares of Class A common stock and use the proceeds from the sale of these newly-issued shares of Class A common stock to fund the cash settlement, which, in effect, limits the amount of the cash payment to the redeeming member. In connection with any redemption or exchange, we will receive a corresponding number of LLC Interests, increasing our total ownership interest in SSE Holdings. Additionally, an equivalent number of shares of Class B common stock will be surrendered and canceled.
The amendment also requires that SSE Holdings, at all times, maintain (i) a one-to-one ratio between the number of outstanding shares of Class A common stock and the number of LLC Interests owned by us and (ii) a one-to-one ratio between the number of shares of Class B common stock owned by the Continuing SSE Equity Owners and the number of LLC Interests owned by the Continuing SSE Equity Owners.
Secondary Offering
As described in Note 1, in August 2015, we completed a secondary offering of 4,000,000 shares of our Class A common stock at a price of $60.00 per share. All of the shares sold in the offering were offered by the Selling Stockholders. We did not receive any proceeds from the sale of shares of Class A common stock offered by the Selling Stockholders. The shares sold in the offering consisted of (i) 844,727 existing shares of Class A common stock and (ii) 3,155,273 newly-issued shares of Class A common stock issued in connection with the redemption of 3,155,273 LLC Interests. Simultaneously, and in connection with the secondary offering, 3,155,273 shares of Class B common stock were surrendered and cancelled.
Redemptions of LLC Interests
Subsequent to the secondary offering, an aggregate of 2,848,035 LLC Interests were redeemed by the Continuing SSE Equity Owners. Pursuant to the SSE Holdings LLC Agreement, we issued 2,848,035 shares of Class A common stock in connection with these redemptions and received 2,848,035 LLC Interests, increasing our ownership interest in SSE Holdings. Simultaneously, and in connection with these redemptions, 2,848,035 shares of Class B common stock were surrendered and cancelled.
Mergers
As described in Note 1, we acquired, by merger, the Former SSE Equity Owners, for which we issued d 5,968,841 shares of Class A common stock as merger consideration. In connection with these mergers, 5,968,841 shares of Class B common stock were canceled and we received 5,968,841 of LLC Interests. Additionally, in December 2015, the Meyer Group exercised their right to effect of tax-free reorganization of USC pursuant to the Stockholders Agreement. Prior to the USC Merger, USC owned 1,727,804 LLC Interests and an equivalent number of shares of our Class B common stock. In connection with the USC Merger, (i) 1,727,804 shares of Class A common stock were issued to the stockholders of USC, with each stockholder receiving newly-issued shares of Class A common stock in an amount equivalent to the number of shares of USC held by such stockholders; (ii) 1,727,804 shares of Class B common stock held by USC were cancelled; and (iii) 1,727,804 LLC Interests held by USC were transferred to us.
Member Distributions
On December 15, 2014, the Board of Directors of SSE Holdings approved a special distribution to its members, to the extent the gross proceeds from the IPO exceeded the anticipated gross proceeds (including as a result of the exercise by the underwriters of their option to purchase additional shares of Class A common stock), in an amount equal to the product of (i) the increased gross proceeds and (ii) 0.273, to be paid from the proceeds of the IPO (the "Special Distribution"). On February 4, 2015, SSE Holdings paid the Additional Distribution to certain of the Original SSE Equity Owners in the amount of $11,125.
Dividend Restrictions
We are a holding company with no direct operations. As a result, our ability to pay cash dividends on our common stock, if any, is dependent upon cash dividends, distributions or other transfers from SSE Holdings. The amounts available to us to pay cash dividends are subject to certain covenants and restrictions set forth in the Revolving Credit Facility. As of December 30, 2015, essentially all of the net assets of SSE Holdings were restricted. See Note 8 for more information regarding the covenants and restrictions set forth in the Revolving Credit Facility.
NON-CONTROLLING INTERESTS
NON-CONTROLLING INTERESTS
NON-CONTROLLING INTERESTS
 
In connection with the Organizational Transactions described in Note 1, we became 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 LLC Interests in SSE Holdings held by Continuing SSE Equity Owners. 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 Continuing SSE Equity Owners will result in a change in ownership and reduce the amount recorded as non-controlling interest and increase additional paid-in capital.
On February 4, 2015, we used the net proceeds from our IPO to purchase 5,750,000 newly-issued LLC Interests. Additionally, in connection with the Organizational Transactions, we acquired 5,968,841 LLC Interests. 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 fiscal 2015, an aggregate of 6,003,308 LLC Interests were redeemed by the Continuing SSE Equity Owners (including 3,155,273 LLC Interests redeemed in connection with the secondary offering) for newly-issued shares of Class A common stock, and we received 6,003,308 LLC Interests, increasing our total ownership interest in SSE Holdings.
In December 2015, we received 1,727,804 LLC Interests in connection with the USC Merger in exchange for an equivalent number of newly-issued shares of Class A common stock. See Note 1 for more information.
As of December 30, 2015, there were 36,250,000 LLC Interests outstanding, of which we owned 19,789,259 LLC Interests, representing a 54.6% ownership interest in SSE Holdings.
The following table summarizes the effects of changes in ownership in SSE Holdings on our equity:
 
2015

 
2014

 
2013

Net income attributable to Shake Shack Inc.
$
(8,776
)
 
$
2,118

 
$
5,423

Transfers (to) from non-controlling interests:
 
 
 
 
 
 
Increase in additional paid-in capital as a result of settlement of unit appreciation rights
987

 
—

 
—

 
Decrease in additional paid-in as a result of the Organizational Transactions
(75,182
)
 
—

 
—

 
Increase in additional paid-in capital as a result of the redemption of LLC Interests
19,934

 
—

 
—

 
Increase in additional paid-in capital as a result of the USC Merger
$
5,908

 
$
—

 
$
—

Change from net income attributable to Shake Shack Inc. and transfers (to) from non-controlling interest
$
(57,129
)
 
$
2,118

 
$
5,423


In the fourth quarter of fiscal 2015, we corrected certain immaterial errors relating to non-controlling interest amounts in prior 2015 fiscal interim periods, after determining that our initial investment in SSE Holdings, made at the time of our IPO, was not correctly accounted for as a change in a parent's ownership interest in a subsidiary while retaining control. As a result, in the fourth quarter of 2015, we recognized a $63,407 increase to non-controlling interests, a $64,785 decrease to additional paid-in capital and a $1,278 increase to retained earnings relating to these errors from prior interim periods. The corrections had no impact on our Consolidated Statements of Income or Cash Flows for the affected interim periods.
EQUITY-BASED COMPENSATION
EQUITY-BASED COMPENSATION
EQUITY-BASED COMPENSATION
 
A summary of equity-based compensation expense recognized during fiscal 2015, 2014 and 2013 is as follows:
 
 
2015

 
2014

 
2013

Unit appreciation rights
$
11,762

 
$
—

 
$
—

Restricted Class B units
605

 
165

 
93

Stock options
4,314

 
—

 
—

Equity-based compensation expense
$
16,681

 
$
165

 
$
93

 
 
 
 
 
 
Total income tax benefit recognized related to equity-based compensation
$
482

 
$
4

 
$
2


Amounts are included in general and administrative expense on the 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 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, each as defined in the UAR Plan. Upon the occurrence of a qualifying transaction, each UAR entitled the holder to receive a payment from us. Such payment and related compensation expense was determined by multiplying (i) the excess, if any, of the qualifying transaction price over the base amount of the UAR, by (ii) the stated number of Class B units deemed covered by the UAR. Effective October 30, 2014, the UAR Plan was amended to provide that the payment to which UAR holders were entitled upon the occurrence of a qualifying transaction would be in the form of securities of the Company or one of its affiliates or such other form of payment as we determined in our sole discretion. The UARs would have terminated on the tenth anniversary of the grant date or upon termination of employment, if earlier.
A summary of UAR activity for fiscal 2015 is as follows:
 
 
UARs

 
Weighted
Average
Base
Price

Outstanding at beginning of period
22,554

 
$
193.51

 
Granted
—

 
—

 
Forfeited
—

 
—

 
Vested and settled
(22,554
)
 
(193.51
)
Outstanding at end of period
—

 
$
—


No compensation expense was recorded during fiscal 2014 and 2013 related to the outstanding UARs because we determined that, as of the period end, it was not probable that a qualifying transaction would occur.
As described in Note 1, on February 4, 2015, we amended and restated the SSE Holdings LLC Agreement to, among other things, (i) provide for a new single class of common membership interests, the LLC Interests, and (ii) exchange all of the then-existing membership interests of the Original SSE Equity Owners for LLC Interests (together, the "Recapitalization Transaction"). The 22,554 outstanding UARs that were settled in connection with the IPO equate to 767,947 LLC Interests with a weighted average base price of $5.68, after giving effect to the Recapitalization Transaction.
Our IPO constituted a qualifying transaction under the terms of the UAR Plan, resulting in a qualifying transaction price of $715.02. 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 fiscal 2015 upon settlement of the outstanding UARs.
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, each as defined in the grant agreement, and any unrecognized compensation expense related to these non-vested units would be subject to acceleration.
A summary of restricted Class B unit activity for fiscal year ended December 30, 2015 is as follows:
 
 
Units

 
Weighted
Average
Grant Date
Fair Value

Outstanding at beginning of period
7,227

 
$
92.31

 
Granted
—

 
—

 
Vested
(7,227
)
 
(92.31
)
 
Forfeited
—

 
—

Outstanding at end of period
—

 
$
—


The weighted average grant date fair value of restricted Class B units granted in fiscal 2013 was $92.31. There were no restricted Class B units granted in fiscal 2015 or fiscal 2014.
The IPO constituted a transaction under the terms of the restricted Class B unit awards that resulted in the accelerated vesting of all then-outstanding awards, and recognition of the unrecognized compensation expense related to those awards. During fiscal 2015, we recognized $605 of equity-based compensation expense upon the vesting of these awards. The total fair value of restricted Class B units that vested during fiscal 2015, 2014 and 2013 was $667, $167, $450, respectively. After giving effect to the Recapitalization Transaction, the 7,227 restricted Class B units that vested in connection with our IPO equate to 158,251 LLC Interests with a weighted-average grant date fair value of $4.22.
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 types of equity-based awards to employees, directors and officers. We do not use cash to settle any of our equity-based awards, and we issue new shares upon the exercise of stock options. In connection with the IPO, we granted 2,622,281 stock options to our directors and certain employees. The stock options were granted with an exercise price of $21.00 per share and vest equally over periods ranging from one to five years.
The fair value of stock option awards was determined on the grant date using the Black-Scholes valuation model based on the following weighted-average assumptions:
 
2015

Expected term (years)(1)
7.5

Expected volatility(2)
35.1
%
Risk-free interest rate(3)
1.6
%
Dividend yield(4)
—
%
(1)
Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method.
(2)
Expected volatility is based on the historical volatility of a selected peer group over a period equivalent to the expected term.
(3)
The risk-free rate rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term.
(4)
We have assumed a dividend yield of zero as we have no plans to declare dividends in the foreseeable future.
A summary of stock option activity for fiscal 2015 is as follows:
 
 
Stock
Options

 
Weighted
Average
Exercise
Price

 
Aggregate Intrinsic Value

 
Weighted Average Remaining Contractual Life (Years)

Outstanding at beginning of period
—

 
$
—

 
 
 
 
 
Granted
2,622,281

 
21.00

 
 
 
 
 
Exercised
—

 
—

 
 
 
 
 
Forfeited
(47,300
)
 
(21.00
)
 
 
 
 
 
Expired
—

 
—

 
 
 
 
Outstanding at end of period
2,574,981

 
$
21.00

 
$
48,822

 
9.1

Options exercisable at end of period
—

 
$
—

 
$
—

 
—

Options expected to vest
2,469,372

 
$
21.00

 
$
46,819

 
9.1


The weighted-average grant date fair value of stock options granted during fiscal 2015 was $8.53. No stock options were granted in fiscal 2014 and fiscal 2013. As of December 30, 2015, there were 2,574,981 stock options outstanding, of which none were exercisable. As of December 30, 2015, total unrecognized compensation expense related to unvested stock options, including an estimate for pre-vesting forfeitures, was $17,937, which is expected to be recognized over a weighted-average period of 4.1 years.
The following table summarizes information about stock options outstanding and exercisable as December 30, 2015:
 
 
Options Outstanding
 
Options Exercisable
 
 
Number Outstanding at December 30, 2015

 
Weighted Average Remaining Contractual Life (Years)
 
Weighted Average Exercise Price

 
Number Exercisable at December 30, 2015

 
Weighted Average Remaining Contractual Life (Years)

 
Weighted Average Exercise Price

Range of Exercise Price
 
 
 
 
 
 
$21.00
 
2,574,981

 
9.1
 
$
21.00

 
—

 
—

 
$
—

INCOME TAXES
INCOME TAXES
INCOME TAXES
 
As a result of the IPO and Organizational Transactions, we became the sole managing member of SSE Holdings, and as a result, began consolidating 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
The components of income before income taxes are follows:
 
2015

 
2014

 
2013

Domestic
$
244

 
$
(3,007
)
 
$
2,364

Foreign
6,184

 
5,787

 
3,519

Income before income taxes
$
6,428

 
$
2,780

 
$
5,883


The components of income tax expense are as follows:
 
 
 
2015

 
2014

 
2013

Current income taxes:
 
 
 
 
 
 
Federal
$
2,474

 
$
—

 
$
—

 
State and local
1,131

 
194

 
266

 
Foreign
433

 
561

 
187

 
Total current income taxes
4,038

 
755

 
453

Deferred income taxes:
 
 
 
 
 
 
Federal
(267
)
 
—

 
—

 
State and local
(467
)
 
(93
)
 
7

 
Total deferred income taxes
(734
)
 
(93
)
 
7

Income tax expense
$
3,304

 
$
662

 
$
460


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:
 
 
2015

 
2014

 
2013

Expected U.S. federal income taxes at statutory rate (34%)
$
2,186

 
$
945

 
$
2,000

State and local income taxes, net of federal benefit
663

 
101

 
176

Foreign withholding taxes
433

 
561

 
188

Non-deductible expenses
653

 
—

 
—

Tax credits
(141
)
 
—

 
—

Non-controlling interest
(490
)
 
—

 
—

LLC flow-through structure
—

 
(976
)
 
(1,904
)
Other
—

 
31

 
—

Income tax expense
$
3,304

 
$
662

 
$
460



Our effective income tax rates for fiscal 2015, 2014 and 2013 were 51.4%, 23.8% and 7.8%, respectively. The significant increase in both the amount of income tax expense and our effective income tax rate from fiscal 2014 to fiscal 2015 is primarily due to the IPO and Organizational Transactions. In fiscal 2014, we were only subject to certain LLC entity-level taxes and foreign withholding taxes, whereas in fiscal 2015 we were also subject to U.S. federal, state and local income taxes on our allocable share of any taxable income or loss generated by SSE Holdings subsequent to the IPO and Organizational Transactions. Additionally, as the non-recurring compensation expenses and other IPO-related expenses were incurred in the period prior to the Organizational Transactions, we are not entitled to any tax benefits related to those expenses. This resulted in a high effective income tax rate when compared to the amount of our consolidated income before income taxes for fiscal 2015. The increase in our effective income tax rate from fiscal 2013 to fiscal 2014 was primarily due to increased foreign withholding taxes resulting from increased licensing revenue.
Deferred Tax Assets and Liabilities
The components of deferred tax assets and liabilities are as follows:
 
 
 
December 30
2015

 
December 31
2014

Deferred tax assets:
 
 
 
 
Investment in partnership
$
154,649

 
$
—

 
Tax Receivable Agreement
69,513

 
—

 
Deferred rent
492

 
448

 
Deferred revenue
63

 
66

 
Stock-based compensation
218

 
—

 
Net operating loss carryforwards
334

 
—

 
Other assets
159

 
26

 
Total gross deferred tax assets
225,428

 
540

Valuation allowance
(23,155
)
 
—

Total deferred tax assets, net of valuation allowance
202,273

 
540

Deferred tax liabilities:
 
 
 
 
Property and equipment
(316
)
 
(379
)
 
Total gross deferred tax liabilities
(316
)
 
(379
)
Net deferred tax assets
$
201,957

 
$
161


As of December 30, 2015, our federal net operating loss carryforwards for income tax purposes was $334. If not utilized, the federal net operating loss carryforward will begin to expire in 2035.
As described in Notes 1 and 11, we acquired an aggregate of 19,789,259 LLC Interests during fiscal 2015 in connection with the IPO, Organizational Transactions, settlement of outstanding UARs, redemptions of LLC Interests and the USC Merger. We recognized a deferred tax asset in the amount of $154,649 associated with the basis difference in our investment in SSE Holdings upon acquiring these LLC Interests. 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 such, we established a valuation allowance in the amount of $23,155 against the deferred tax asset to which this portion relates.
During fiscal 2015, we also recognized $69,513 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. 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 December 30, 2015, 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. The net change in valuation allowance for fiscal 2015 was $23,155. There was no net change in valuation allowance in fiscal 2014.
In the fourth quarter of fiscal 2015, we corrected certain immaterial errors relating to prior fiscal 2015 interim periods for our deferred income taxes and liabilities under the Tax Receivable Agreement after determining that our prior computations of our liabilities under the Tax Receivable Agreement utilized inappropriate assumptions and incorrectly applied certain provisions of the Tax Receivable Agreement. Additionally, we did not recognize certain deferred tax assets related to historical tax attributes we acquired upon our acquisition of the Former SSE Equity Owners. As a result, in fiscal 2015, we recognized a $15,043 increase in deferred income taxes, a $12,045 increase to liabilities under tax receivable agreement and a $4,026 increase to additional paid-in capital relating to these errors from prior interim periods. The corrections had no impact on our Consolidated Statements of Income or Cash Flows for the affected interim periods.
Uncertain Tax Positions
No uncertain tax positions existed as of December 30, 2015 and December 31, 2014. Shake Shack Inc. was formed in September 2014 and did not engage in any operations prior to the IPO and 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 Continuing SSE Equity Owners and other qualifying transactions. 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 by the Continuing SSE Equity Owners 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 the Continuing SSE Equity Owners (the "Tax Receivable Agreement") that provides for the payment by us to the Continuing SSE Equity Owners 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 Continuing SSE Equity Owner under the Tax Receivable Agreement are assignable to transferees of its LLC Interests.
During fiscal 2015, SSE Holdings paid a distribution in the amount of $11,125 to certain of the Original SSE Equity Owners (the "Special Distribution"). The Special Distribution was considered a direct purchase of LLC Interests for U.S. federal income tax purposes and resulted in an increase in the tax basis of the net assets of SSE Holdings subject to the provisions of the Tax Receivable Agreement. Additionally, during fiscal 2015, an aggregate of 6,003,308 LLC Interests were redeemed by the Continuing SSE Equity Owners (including 3,155,273 LLC Interests redeemed in connection with the secondary offering) for newly-issued shares of Class A common stock. In connection with these redemptions, we received 6,003,308 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 a liability for the TRA Payments due to the Continuing SSE Equity Owners, representing 85% of the aggregate tax benefits we expect to realize from the tax basis increases related to the Special Distribution and redemptions 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 December 30, 2015, the total amount of TRA Payments due to the Continuing SSE Equity Owners under the Tax Receivable Agreement was $173,090, of which $2,157 was included in other current liabilities on the Consolidated Balance Sheet. See Note 17 for more information relating to our liabilities under the Tax Receivable Agreement.
Pro Forma Financial Information
For periods prior to the IPO and Organizational Transactions, our income taxes represent those of SSE Holdings, our predecessor, and relate solely to foreign withholding taxes and certain LLC entity-level taxes. As a result of the IPO and Organizational Transactions that occurred on February 4, 2015, we became subject to U.S. federal and certain state and local income taxes with respect to our allocable share of any taxable income or loss generated by SSE Holdings. The pro forma financial information presented on the Consolidated Statements of Income (Loss) for fiscal 2015 has been computed to reflect income tax expense at an effective tax rate of 27.8%. The amounts were calculated assuming the Organizational Transactions occurred on January 1, 2015 and were based on the statutory rates in effect during the period.
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.
As described in Note 1, on February 4, 2015, the SSE Holdings LLC Agreement was amended and restated to, among other things, (i) provide for a new single class of common membership interests, the LLC Interests, and (ii) exchange all of the then-existing membership interests of the Original SSE Equity Owners for LLC Interests. For purposes of calculating earnings per share, the prior period amounts have been retroactively adjusted to give effect to the above-mentioned amendment and resulting recapitalization. The computations of earnings per share for periods prior to our IPO do not consider the 5,750,000 shares of Class A common stock issued to investors in our IPO or the 339,306 shares of Class A common stock issued upon settlement of outstanding UARs in connection with the IPO.
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 fiscal 2015, 2014 and 2013.
 
 
 
2015

 
2014

 
2013

Numerator:
 
 
 
 
 
 
Net income
$
3,124

 
$
2,118

 
$
5,423

 
Less: net income attributable to non-controlling interests
11,900

 
—

 
—

 
Net income (loss) attributable to Shake Shack Inc.
$
(8,776
)
 
$
2,118

 
$
5,423

Denominator:
 
 
 
 
 
 
Weighted-average shares of Class A common stock outstanding—basic
13,588

 
29,977

 
29,934

 
Effect of dilutive securities:
 
 
 
 
 
 
 
Restricted Class B units
—

 
145

 
84

 
Weighted-average shares of Class A common stock outstanding—diluted
13,588

 
30,122

 
30,018

 
 
 
 
 
 
 
 
Earnings per share of Class A common stock—basic
$
(0.65
)
 
$
0.07

 
$
0.18

Earnings per share of Class A common stock—diluted
$
(0.65
)
 
$
0.07

 
$
0.18


2,574,981 stock options were excluded from the computation of diluted earnings per share of Class A common stock for fiscal 2015 because the effect would have been anti-dilutive as we recorded a net loss for the period.
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. Shares of our Class B common stock are, however, considered potentially dilutive shares of Class A common stock. After evaluating the potential dilutive effect under the if-converted and two-class methods, the 16,460,741 shares of Class B common stock outstanding as of December 30, 2015 were determined to be anti-dilutive and have therefore been excluded from the computations of diluted earnings per share of Class A common stock.
SUPPLEMENTAL CASH FLOW INFORMATION
SUPPLEMENTAL CASH FLOW INFORMATION
SUPPLEMENTAL CASH FLOW INFORMATION
 
The following table sets forth supplemental cash flow information for fiscal 2015, 2014 and 2013:
 
 
2015

 
2014

 
2013

Cash paid for:
 
 
 
 
 
 
Income taxes, net of refunds
$
416

 
$
836

 
$
639

 
Interest, net of amounts capitalized
92

 
123

 
19

Non-cash investing activities:
 
 
 
 
 
 
Accrued purchases of property and equipment
4,904

 
3,577

 
234

 
Property and equipment acquired through landlord incentives
—

 
6,000

 
—

 
Class A common stock issued in connection with the acquisition of the Former SSE Equity Owners
6

 
—

 
—

 
Class A common stock issued in connection with the USC Merger
2

 
—

 
—

Non-cash financing activities:
 
 
 
 
 
 
Cancellation of Class B common stock in connection with the Organizational Transactions
(6
)
 
—

 
—

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

 
—

 
—

 
Cancellation of Class B common stock in connection with the redemption of LLC Interests
(6
)
 
—

 
—

 
Cancellation of Class B common stock in connection with the USC Merger
(2
)
 
—

 
—

 
Establishment of liabilities under tax receivable agreement
173,090

 
—

 
—

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 a specified threshold and are responsible for our proportionate share of real estate taxes and utilities. See Note 9, Leases.
As security under the terms of several of our leases, we are obligated under letters of credit totaling $160 as of December 30, 2015. The letters of credit expire on April 23, 2016 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. These volume commitments are not subject to any time limit and there are no material financial penalties associated with these agreements in the event of early termination.
Legal Contingencies
In November 2015, we met with a law firm representing two former Shake Shack managers who alleged that Shake Shack improperly classified its 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 lawsuits vigorously, we agreed to mediate the matter. At the conclusion of the meeting, the parties entered into a Memorandum of Understanding, and the Company agreed to create a fund of $750 to settle the matter. In exchange, all participating managers (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 December 30, 2015, we recognized a liability of $770 for this matter and related expenses.
We are subject to various legal 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 December 30, 2015, the amount of ultimate liability with respect to these matters was not material.
Liabilities under Tax Receivable Agreement
As described in Note 14, we are a party to the Tax Receivable Agreement under which we are contractually committed to pay the Continuing SSE Equity Owners 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 fiscal 2015, as a result of the Special Distribution and redemptions of LLC Interests, we recognized liabilities totaling $173,090 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. 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 generated by all transactions that occurred in fiscal 2015.
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 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.
Under the terms of the management agreement with USHG, as amended, in fiscal 2014, we paid a 2.5% management fee to USHG based on Shack sales and licensing revenue generated from license agreements with unaffiliated entities. Total management fees, which are included in general and administrative expenses, amounted to $2,927 and $2,455 for fiscal 2014 and 2013, respectively. Effective January 1, 2015, the management agreement was amended and restated. As a result, we are no longer obligated to pay management fees to USHG. Therefore, no management fees were paid to USHG for fiscal 2015.
Previously, we sub-leased office space from USHG on a month-to-month basis. Amounts paid to USHG as rent totaled $38 and $236 for fiscal 2014 and 2013, respectively. These amounts are included in general and administrative expense on the Consolidated Statements of Income (Loss). No amounts were paid during fiscal 2015.
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. Amounts paid to the USHG for these health insurance costs were $1,306 and $865 for fiscal 2014 and 2013, respectively. In February 2015, we established our own self-funded health insurance plan for our employees and ceased payments to USHG. The total amount paid to USHG for these health insurance costs for fiscal 2015 was $146. These amounts are included in labor and related expenses and general and administrative expenses on the 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 $157, $490 and $473 for fiscal 2015. 2014 and 2013, respectively, and are included in general and administrative expenses on the Consolidated Statements of Income (Loss).
Total amounts payable to USHG as of December 30, 2015 and December 31, 2014 were $2 and $238, respectively, and are included in other current liabilities on the Consolidated Balance Sheets. No amounts were due from USHG as of December 30, 2015 and December 31, 2014.
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. Amounts paid to us by HYSE for fiscal 2015, 2014 and 2013 were $282, $218 and $215, respectively, and are included in licensing revenue on the Consolidated Statements of Income (Loss). No amounts were due from HYSE as of December 30, 2015 and December 31, 2014.
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 $692, $528 and $607 for fiscal 2015, 2014 and 2013, respectively. These amounts are included in occupancy and related expenses on the Consolidated Statements of Income (Loss). Total amounts due to the MSP Conservancy as of December 30, 2015 were $17. No amounts were due to the MSP Conservancy as of December 31, 2014 as our Madison Square Park Shack was closed for renovations.
Share Our Strength
The Chairman of our Board of Directors serves as a director of Share Our Strength, for which Shake Shack hold the "Great American Shake Sale" every year during the month of May to raise money and awareness for childhood hunger. During the Great American Shake Sale, we encourage guests to donate money to Share Our Strength's No Kid Hungry campaign in exchange for a coupon for a free cake-themed shake. All of the guest donations we collect go directly to Share Our Strength. We raised a total of $504, $338 and $286 in fiscal 2015, 2014 and 2013, respectively, and the proceeds were remitted to Share Our Strength in the respective years. We incurred costs of approximately $109, $69 and $53 for fiscal 2015, 2014 and 2013, respectively, representing the cost of the free shakes redeemed. These costs are included in general and administrative expense and other operating expenses on the Consolidated Statements of Income (Loss).
Tax Receivable Agreement
In connection with our IPO, we entered into a tax receivable agreement with the Continuing SSE Equity Owners that provides for the payment by us to the Continuing SSE Equity Owners of 85% of the amount of any tax benefits that Shake Shack actually realizes or in some cases is deemed to realize as a result of (i) increases in the tax basis of the net assets of SSE Holdings resulting from any redemptions or exchanges of LLC Interests and (ii) certain other tax benefits related to our making payments under the Tax Receivable Agreement. See Note 14 for further information. There were no amounts paid under the Tax Receivable Agreement to the Continuing SSE Equity Owners during fiscal 2015. Total amounts due to the Continuing SSE Equity Owners as of December 30, 2015 under the Tax Receivable Agreement were $173,090. As the Tax Receivable Agreement went into effect in January 2015, no amounts were due to the Continuing SSE Equity Owners under the Tax Receivable Agreement as of December 31, 2014, and no amounts were paid in fiscal 2014 and 2013.
GEOGRAPHIC INFORMATION
GEOGRAPHIC INFORMATION
GEOGRAPHIC INFORMATION
 
Revenue by geographic area for fiscal 2015, 2014 and 2013 is as follows:
 
 
2015

 
2014

 
2013

United States
$
184,408

 
$
112,743

 
$
78,937

Other countries
6,184

 
5,787

 
3,519

Total revenue
$
190,592

 
$
118,530

 
$
82,456


Revenues are shown based on the geographic location of our customers and licensees. All of our assets are located in the United States.
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
 
The following table sets forth certain unaudited financial information for each quarter of fiscal 2015 and fiscal 2014. The unaudited quarterly information includes all adjustments (consisting of normal recurring adjustments) that, in the opinion of management, are necessary for the fair presentation of the information presented. Operating results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year.
 
 
 
2015
 
 
 
First

 
Second

 
Third

 
Fourth

 
 
 
Quarter

 
Quarter

 
Quarter

 
Quarter

Total revenue
$
37,808

 
$
48,450

 
$
53,273

 
$
51,061

Operating income (loss)
(10,949
)
 
6,244

 
7,804

 
3,654

Net income (loss)
(11,260
)
 
5,145

 
6,193

 
3,046

Net income (loss) attributable to Shake Shack Inc.
(12,668
)
 
1,118

 
1,528

 
1,246

Earnings (loss) per share(1):
 
 
 
 
 
 
 
 
Basic
$
(1.06
)
 
$
0.09

 
$
0.11

 
$
0.08

 
Diluted
$
(1.06
)
 
$
0.08

 
$
0.10

 
$
0.07

 
 
 
2014
 
 
 
First

 
Second

 
Third

 
Fourth

 
 
 
Quarter

 
Quarter

 
Quarter

 
Quarter(2)

Total revenue
$
24,196

 
$
27,737

 
$
31,825

 
$
34,772

Operating income (loss)
1,229

 
2,142

 
759

 
(987
)
Net income (loss)
1,092

 
1,949

 
504

 
(1,427
)
Net income (loss) attributable to Shake Shack Inc.
1,092

 
1,949

 
504

 
(1,427
)
Earnings (loss) per share(1):
 
 
 
 
 
 
 
 
Basic
$
0.04

 
$
0.07

 
$
0.02

 
$
(0.05
)
 
Diluted
$
0.04

 
$
0.07

 
$
0.02

 
$
(0.05
)
(1)
Basic and diluted earnings per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted earnings per share amounts may not equal annual basic and diluted earnings per share amounts.
(2)
We operate on a 52/53 week fiscal year that ends on the last Wednesday of the calendar year. Fiscal 2014 was a 53-week year with the extra operating week falling in our fiscal fourth quarter. Fiscal 2015 contained 52 weeks.
SCHEDULE I: CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Condensed Financial Information of Registrant
SHAKE SHACK INC.
CONDENSED BALANCE SHEETS
(PARENT COMPANY ONLY)
(in thousands, except share and per share amounts)
 
 
 
December 30
2015

 
December 31
2014

ASSETS
 
 
 
Current assets:
 
 
 
 
Cash
$
422

 
$
—

 
Prepaid expenses
628

 
—

 
Total current assets
1,050

 
—

Due form SSE Holdings
3,979

 
—

Deferred income taxes, net
201,614

 
—

Investment in subsidiaries
67,810

 
—

TOTAL ASSETS
$
274,453

 
$
—

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities
 
 
 
 
Income taxes payable
$
689

 
$
—

 
Accrued expenses
59

 
—

 
Current portion of liabilities under tax receivable agreement
2,157

 
—

 
Total current liabilities
2,905

 
—

Liabilities under tax receivable agreement, net of current portion
170,933

 
—

Total liabilities
173,838

 
—

Commitments and contingencies

 

Stockholders' equity:
 
 
 
 
Preferred stock, no par value—10,000,000 shares authorized; none issued and outstanding as of December 30, 2015
—

 
—

 
Common stock, $0.01 par value—100 shares authorized; none issued and outstanding as of December 31, 2014
—

 
—

 
Class A common stock, $0.001 par value—200,000,000 shares authorized; 19,789,259 shares issued and outstanding as of December 30, 2015
20

 
—

 
Class B common stock, $0.001 par value—35,000,000 shares authorized; 16,460,741 shares issued and outstanding as of December 30, 2015
16

 
—

 
Additional paid-in capital
96,311

 
—

 
Retained earnings
4,273

 
—

 
Accumulated other comprehensive loss
(5
)
 
—

 
Total stockholders' equity
100,615

 
—

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
274,453

 
$
—

See accompanying Notes to Condensed Financial Statements.
SHAKE SHACK INC.
CONDENSED STATEMENTS OF INCOME
(PARENT COMPANY ONLY)
(in thousands)
 
 
 
Fiscal Year Ended
 
 
 
December 30
2015

 
December 31
2014

Intercompany revenue
$
1,336

 
$
—

TOTAL REVENUE
1,336

 
—

General and administrative expenses
1,336

 
—

TOTAL EXPENSES
1,336

 
—

OPERATING INCOME
—

 
—

Equity in net income of subsidiaries
6,906

 
—

INCOME BEFORE INCOME TAXES
6,906

 
—

Income tax expense
2,633

 
—

NET INCOME
$
4,273

 
$
—

See accompanying Notes to Condensed Financial Statements.
SHAKE SHACK INC.
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(PARENT COMPANY ONLY)
(in thousands)
 
 
 
Fiscal Year Ended
 
 
 
December 30
2015

 
December 31
2014

Net income
$
4,273

 
$
—

Other comprehensive loss:
 
 
 
 
Unrealized holding losses on available-for-sale securities
(5
)
 
—

 
Income tax benefit
—

 
—

OTHER COMPREHENSIVE LOSS, NET OF TAX
(5
)
 
—

COMPREHENSIVE INCOME
$
4,268

 
$
—

See accompanying Notes to Condensed Financial Statements.
SHAKE SHACK INC.
CONDENSED STATEMENTS OF CASH FLOWS
(PARENT COMPANY ONLY)
(in thousands)
 
 
 
 
 
 
Fiscal Year Ended
 
 
 
 
 
 
December 30
2015

 
December 31
2014

OPERATING ACTIVITIES
 
 
 
Net income
$
4,273

 
$
—

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Equity in net income of subsidiaries
(6,906
)
 
—

 
Equity-based compensation
330

 
—

 
Deferred income taxes
(551
)
 
—

 
Changes in operating assets and liabilities:
 
 
 
 
 
Due from SSE Holdings
4

 
—

 
 
Accrued expenses
58

 
—

 
 
Income taxes payable
3,184

 
—

NET CASH PROVIDED BY OPERATING ACTIVITIES
392

 
—

INVESTING ACTIVITIES
 
 
 
Purchases of LLC Interests from SSE Holdings
(112,298
)
 
—

NET CASH USED IN INVESTING ACTIVITIES
(112,298
)
 
—

FINANCING ACTIVITIES
 
 
 
Proceeds from issuance of Class A common stock sold in initial public offering, net of underwriting discounts and commissions
112,298

 
—

Proceeds from issuance of Class B common stock
30

 
—

NET CASH PROVIDED BY FINANCING ACTIVITIES
112,328

 
—

INCREASE IN CASH
422

 
—

CASH AT BEGINNING OF PERIOD
—

 
—

CASH AT END OF PERIOD
$
422

 
$
—

 
 
 
 
 
 
 
 
 
Non-cash investing activities:
 
 
 
 
Class A common stock issued in connection with the acquisition of the Former SSE Equity Owners
$
6

 
$
—

 
Class A common stock issued in connection with the USC Merger
2

 
—

 
Class A common stock issued in connection with the acquisition of LLC Interests upon redemption by the Continuing SSE Equity Owners
19,933

 
—

Non-cash financing activities:
 
 
 
 
Cancellation of Class B common stock in connection with the Organizational Transactions
(6
)
 
—

 
Cancellation of Class B common stock in connection with the redemption of LLC Interests
(6
)
 
—

 
Cancellation of Class B common stock in connection with the USC Merger
(2
)
 
—

 
Establishment of liabilities under tax receivable agreement
173,090

 
—

See accompanying Notes to Condensed Financial Statements.
NOTE 1: ORGANIZATION
Shake Shack Inc. (the "Parent Company") was formed on September 23, 2014 as a Delaware corporation and is a holding company with no direct operations. The Parent Company's assets consist primarily of its equity interest in SSE Holdings, LLC ("SSE Holdings") and certain deferred tax assets.
On February 4, 2015, the Parent Company completed an initial public offering ("IPO") of 5,750,000 shares of its Class A common stock at a public offering price of $21.00 per share, which includes 750,000 shares issued pursuant to the underwriters' over-allotment option. The Parent Company received $112,298 in proceeds, net of underwriting discounts and commissions, which it used to purchase newly-issued membership interests from SSE Holdings at a price per interest equal to the initial public offering price of its Class A common stock.
The Parent Company's cash inflows are primarily from cash dividends or distributions and other transfers from SSE Holdings. The amounts available to the Parent Company to fulfill cash commitments and pay cash dividends on its common stock are subject to certain restrictions in SSE Holdings' revolving credit agreement. See Note 8 to the consolidated financial statements.
NOTE 2: BASIS OF PRESENTATION
These condensed parent company financial statements should be read in conjunction with the consolidated financial statements of Shake Shack Inc. and the accompanying notes thereto, included in this Annual Report on Form 10-K. For purposes of these condensed financial statements, the Parent Company's interest in SSE Holdings is recorded based upon its proportionate share of SSE Holdings' net assets (similar to presenting them on the equity method).
The Parent Company is the sole managing member of SSE Holdings, and pursuant to the Third Amended and Restated LLC Agreement of SSE Holdings (the “LLC Agreement”), receives compensation in the form of reimbursements for all costs associated with being a public company. Intercompany revenue consists of these reimbursement payments and is recognized when the corresponding expense to which it relates is recognized.
Certain intercompany balances presented in these condensed parent company financial statements are eliminated in the consolidated financial statements. $3,979 of payables were eliminated in consolidation as of December 30, 2015. $1,336 and $6,906 of intercompany revenue and equity in net income of subsidiaries was eliminated in consolidation for fiscal 2015. Related party amounts that were not eliminated in the consolidated financial statements include the Parent Company's liabilities under the tax receivable agreement, which totaled $173,090 as of December 30, 2015.
NOTE 3: COMMITMENTS AND CONTINGENCIES
On February 4, 2015, the Parent Company entered into a tax receivable agreement with certain members of SSE Holdings (the "Continuing SSE Equity Owners") that provides for the payment by us to the Continuing SSE Equity Owners 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 certain transactions. See Note 14 to the consolidated financial statements for more information regarding the Parent Company's tax receivable agreement. As described in Note 17 to the consolidated financial statements, amounts payable under the tax receivable agreement are contingent upon, among other things, (i) generation of future taxable income of Shake Shack Inc. over the term of the tax receivable agreement and (ii) future changes in tax laws. As of December 30, 2015, liabilities under the tax receivable agreement totaled $173,090.
SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS
SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS
Schedule II: Valuation and Qualifying Accounts
 
 
 
Balance at beginning of period

 
Additions
 
Reductions

 
Balance at end of period

(in thousands)
 
 
Charged to costs and expenses

 
Charged to other accounts

 
 
Deferred tax asset valuation allowance:
 
 
 
 
 
 
 
 
 
 
Fiscal year ended December 25, 2013
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Fiscal year ended December 31, 2014
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Fiscal year ended December 30, 2015
 
$
—

 
$
—

 
$
39,700

(1)
$
(16,545
)
 
$
23,155

(1)
Amount relates to a valuation allowance established on deferred tax assets related to our investment in SSE Holdings.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
Basis of Presentation 
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include our accounts and the accounts of our subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior period amounts to conform to the current year presentation.
Fiscal Year 
Fiscal Year
We operate on a 52/53 week fiscal year ending on the last Wednesday in December. Fiscal year 2015 contained 52 weeks and ended on December 30, 2015. Fiscal year 2014 contained 53 weeks and ended on December 31, 2014. Fiscal year 2013 contained 52 weeks ended on and December 25, 2013. Unless otherwise stated, references to years in this report relate to fiscal years.
Use of Estimates 
Use of Estimates
The preparation of these consolidated financial statements in conformity with U.S. GAAP requires management 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.
Segment Reporting 
Segment Reporting
We own and operate Shacks in the United States. We also have domestic and international licensed operations. Our chief operating decision maker (the "CODM") is our Chief Executive Officer. As the CODM reviews financial performance and allocates resources at a consolidated level on a recurring basis, we have one operating segment and one reportable segment.
Fair Value Measurements 
Fair Value Measurements
We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, we assume the highest and best use of the asset by market participants in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions, and credit risk.
Assets and liabilities are classified using a fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
*
Level 1 - Quoted prices in active markets for identical assets or liabilities
*
Level 2 - Observable inputs other than quoted prices in active markets for identical assets or liabilities, quoted prices for identical assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities
*
Level 3 - Inputs that are both unobservable and significant to the overall fair value measurements reflecting an entity's estimates of assumptions that market participants would use in pricing the asset or liability
Cash and Cash Equivalents 
Cash and Cash Equivalents
Cash and cash equivalents consist primarily of cash on hand, deposits with banks, and short-term, highly liquid investments that have original maturities of three months or less. Cash equivalents are stated at cost, which approximates fair value. Cash equivalents consist primarily of money market funds.
Accounts Receivable 
Accounts Receivable
Accounts receivable consist primarily of receivables from landlords for tenant improvement allowances, receivables from our licensees for licensing revenue and related reimbursements, credit card receivables and vendor rebates. We evaluate the collectibility of our accounts receivable based on a variety of factors, including historical experience, current economic conditions and other factors.
Inventories 
Inventories
Inventories, which consist of food, beer, wine, other beverages and retail merchandise, are stated at the lower of cost or market with cost determined on a first-in, first-out basis.
Property and Equipment 
Property and Equipment
Property and equipment is stated at historical cost less accumulated depreciation. Property and equipment is depreciated based on the straight-line method over the estimated useful lives of the assets, generally ranging from three to seven years for equipment, furniture and fixtures, and computer equipment and software. Leasehold improvements are depreciated over the shorter of their estimated useful life or the related lease life, generally ranging from 10 to 20 years. For leases with renewal periods at our option, we use the original lease term, excluding renewal option periods, to determine estimated useful lives.
Costs incurred when constructing Shacks are capitalized. The cost of repairs and maintenance are expensed when incurred. Costs for refurbishments and improvements that significantly increase the productive capacity or extend the useful life of the asset are capitalized. When assets are disposed of, the resulting gain or loss is recognized on the Consolidated Statements of Income (Loss).
We assess potential impairments to our long-lived assets, which includes property and equipment, whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of an asset is measured by a comparison of the carrying amount of an asset group to its estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset exceeds the fair value of the asset.
Deferred Financing Costs 
Deferred Financing Costs
Deferred financing costs incurred in connection with the issuance of long-term debt and establishing credit facilities are capitalized and amortized to interest expense based on the related debt agreements. Deferred financing costs are included in other assets on the Consolidated Balance Sheets.
Other Assets 
Other Assets
Other assets consist primarily of long-term marketable securities, security deposits, transferable liquor licenses and certain custom furniture pre-ordered for future Shacks and yet to be placed in service.
The costs of obtaining non-transferable liquor licenses that are directly issued by local government agencies for nominal fees are expensed as incurred. The costs of purchasing transferable liquor licenses through open markets in jurisdictions with a limited number of authorized liquor licenses are capitalized as indefinite-lived intangible assets. Annual liquor license renewal fees are expensed over the renewal term. As of December 30, 2015 and December 31, 2014, indefinite-lived intangible assets relating to transferable liquor licenses totaled $701. We evaluate our indefinite-lived intangible assets for impairment annually during our fiscal fourth quarter, and whenever events or changes in circumstances indicate that an impairment may exist. When evaluating other intangible assets for impairment, we may first perform a qualitative assessment to determine whether it is more likely than not that an intangible asset group is impaired. If we do not perform the qualitative assessment, or if we determine that it is not more likely than not that the fair value of the intangible asset group exceeds its carrying amount, we calculate the estimated fair value of the intangible asset group. If the carrying amount of the intangible asset group exceeds the estimated fair value, an impairment charge is recorded to reduce the carrying value to the estimated fair value. In addition, we continuously monitor and may revise our intangible asset useful lives if and when facts and circumstances change.
Equity-based Compensation 
Equity-based Compensation
Equity-based compensation expense is measured based on fair value. We recognize compensation expense on a straight-line basis over the requisite service period. For awards with graded-vesting features and service conditions only, compensation expense is recognized on a straight-line basis over the total requisite service period for the entire award. Equity-based compensation expense is included within general and administrative expenses on the Consolidated Statements of Income (Loss).
Leases 
Leases
We lease all of our domestic company-operated Shacks, our home office and certain equipment under various non-cancelable lease agreements that expire on various dates through 2032. Generally, our real estate leases have initial terms ranging from 10 to 20 years and typically include two five-year renewal options. At the inception of each lease, we determine its classification as an operating or capital lease. All of our leases are classified as operating leases and typically provide for fixed minimum rent payments and/or contingent rent payments based upon sales in excess of specified thresholds. When the achievement of such sales thresholds are deemed to be probable, contingent rent is accrued in proportion to the sales recognized during the period. For operating leases that include rent holidays and rent escalation clauses, we recognize rent expense on a straight-line basis over the lease term from the date we take possession of the leased property. The difference between the straight-line rent amounts and amounts payable under the lease agreements is recorded as deferred rent and is included as rent expense in occupancy and related expenses on the Consolidated Statements of Income (Loss). Rent expense incurred before a Shack opens is recorded in pre-opening costs. Once a domestic company-operated Shack opens, we record the straight-line rent expense and any contingent rent, if applicable, in occupancy and related expenses on the Consolidated Statements of Income (Loss).
Many of our leases also require us to pay real estate taxes, common area maintenance costs and other occupancy costs which are included in occupancy and related expenses on the Consolidated Statements of Income (Loss).
We expend cash for leasehold improvements to build out and equip our leased premises. We may also expend cash for structural additions made to leased premises. Generally, a portion of the leasehold improvements and building costs are reimbursed by our landlords as landlord incentives pursuant to agreed-upon terms in our lease agreements. If obtained, landlord incentives usually take the form of up-front cash, full or partial credits against our future minimum or contingent rents otherwise payable by us, or a combination thereof. When contractually due, we classify landlord incentives as deferred rent on the Consolidated Balance Sheets and amortize the landlord incentives on a straight-line basis over the lease term as a reduction of occupancy costs and related expenses or pre-opening costs on the Consolidated Statements of Income (Loss).
Revenue Recognition 
Revenue Recognition
Revenue consists of Shack sales and licensing revenue. Revenue from Shack sales are presented net of discounts and recognized when food and beverage products are sold. Sales tax collected from customers is excluded from Shack sales and the obligation is included in sales tax payable until the taxes are remitted to the appropriate taxing authorities. Revenue from our gift cards are deferred and recognized upon redemption. Licensing revenues include initial territory fees and ongoing licensing fees from all licensed Shacks. Initial territory fees are recorded as deferred revenue when received and proportionate amounts are recognized as revenue when a licensed Shack is opened and all material services and conditions related to the fee have been substantially performed. Ongoing licensing fees from these Shacks are based on a percentage of sales and are recognized as revenue as the fees are earned and become receivable from the licensee.
Income Taxes 
Income Taxes
We account for income taxes pursuant to the asset and liability method which requires the recognition of deferred income tax assets and liabilities related to the expected future tax consequences arising from temporary differences between the carrying amounts and tax bases of assets and liabilities based on enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse. Any effects of changes in income tax rates or laws are included in income tax expense in the period of enactment. A valuation allowance is recognized if we determine it is more likely than not that all or a portion of a deferred tax asset will not be recognized.
Pre-Opening Costs 
Pre-Opening Costs
Pre-opening costs are expensed as incurred and consist primarily of legal fees, occupancy, manager and employee wages, travel and related training costs incurred prior to the opening of a Shack.
Advertising 
Advertising
The cost of advertising and promotions are expensed as incurred.
Recently Issued and Adopted Accounting Pronouncements 
Recently Adopted Accounting Pronouncements     
In November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2015-17, Balance Classification of Deferred Taxes ("ASU 2015-17"). ASU 2015-17 requires deferred tax liabilities and assets be classified as non-current in a classified statement of financial position. ASU 2015-17 is effective for reporting periods after December 15, 2016 and may be adopted either retrospectively or prospectively. Early adoption is permitted and we elected to early adopt this guidance as of December 30, 2015 and to apply the guidance retrospectively to all periods presented. Accordingly, we reclassified the prior period amount of $20 related to our deferred tax asset from current to non-current, resulting in an increase to the non-current deferred income tax asset for the same amount for that period. The application of this guidance affects classification only, and did not have a material effect on our consolidated financial position or results of operations. 
Recently Issued Accounting Pronouncements       
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 that this new standard 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 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. ASU 2015-05 is effective for reporting periods beginning after December 15, 2015 and may be adopted either retrospectively or prospectively. The adoption of ASU 2015-05 will not have a significant impact on our consolidated financial statements.
In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"). 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 2015-03 is effective for reporting periods beginning after December 15, 2015. The adoption of ASU 2015-03 will not have a significant impact on its consolidated financial statements.
In February 2015, the FASB issued Accounting Standards Update No. 2015-02, Consolidation ("ASU 2015-02"). 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. ASU 2015-02 is effective for reporting periods beginning after December 15, 2015. The adoption of ASU 2015-02 will not have a significant impact on its 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 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.
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 December 30, 2015:
 
 
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.
Available-for-sale Securities 
The following tables summarize our cash, cash equivalents and marketable securities by significant investment categories as of December 30, 2015:
 
 
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.
Marketable Securities, Available-for-sale Securities, Policy 
The following table summarizes the estimated fair value of our investments in marketable debt securities, accounted for as available-for-sale securities and classified by the contractual maturity date of the securities:
 
December 30
2015

Due within one year
$
275

Due after one year through 5 years
2,111

Due after 5 years through 10 years
—

Due after 10 years
—

Total
$
2,386

ACCOUNTS RECEIVABLE (Tables)
Schedule of Accounts Receivable
The components of accounts receivable as of December 30, 2015 and December 31, 2014 are as follows:
 
December 30
2015

 
December 31
2014

Landlord receivables
$
1,380

 
$
1,088

Licensing receivables
1,669

 
822

Credit card receivables
1,023

 
660

Other receivables
145

 
708

Accounts receivable
$
4,217

 
$
3,278

INVENTORIES (Tables)
Inventories
Inventories consisted of the following:
 
December 30
2015

 
December 31
2014

Food
$
328

 
$
354

Wine
30

 
28

Beer
46

 
33

Beverages
57

 
42

Retail merchandise
82

 
72

Inventories
$
543

 
$
529

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

 
December 31
2014

Leasehold improvements
$
82,904

 
$
58,272

Equipment
16,903

 
12,108

Furniture and fixtures
4,965

 
3,249

Computer equipment and software
5,197

 
3,529

Construction in progress
6,591

 
6,309

Property and equipment, gross
116,560

 
83,467

Less: accumulated depreciation
(23,519
)
 
(13,343
)
Property and equipment, net
$
93,041

 
$
70,124

SUPPLEMENTAL BALANCE SHEET INFORMATION (Tables)
Components of Other Current Liabilities
The components of other current liabilities as of December 30, 2015 and December 31, 2014 are as follows:
 
December 30
2015

 
December 31
2014

Sales tax payable
$
1,073

 
$
736

Current portion of liabilities under tax receivable agreement
2,157

 
—

Gift card liability
833

 
625

Other
551

 
388

Other current liabilities
$
4,614

 
$
1,749

LEASES (Tables)
Schedule of Rent Expense 
A summary of rent expense under operating lease agreements is as follows:
 
 
2015

 
2014

 
2013

Minimum rent
$
10,796

 
$
6,497

 
$
4,507

Deferred rent
1,482

 
2,830

 
975

Contingent rent
2,959

 
1,883

 
1,626

Total rent expense
$
15,237

 
$
11,210

 
$
7,108

Schedule of Future Minimum Rental Payments for Operating Leases 
As of December 30, 2015, future minimum lease payments under non-cancelable operating leases consisted of the following:
2016
$
14,199

2017
15,664

2018
16,329

2019
16,507

2020
15,982

Thereafter
97,415

Total minimum lease payments
$
176,096

NON-CONTROLLING INTERESTS (Tables)
Schedule of non-controlling interest
The following table summarizes the effects of changes in ownership in SSE Holdings on our equity:
 
2015

 
2014

 
2013

Net income attributable to Shake Shack Inc.
$
(8,776
)
 
$
2,118

 
$
5,423

Transfers (to) from non-controlling interests:
 
 
 
 
 
 
Increase in additional paid-in capital as a result of settlement of unit appreciation rights
987

 
—

 
—

 
Decrease in additional paid-in as a result of the Organizational Transactions
(75,182
)
 
—

 
—

 
Increase in additional paid-in capital as a result of the redemption of LLC Interests
19,934

 
—

 
—

 
Increase in additional paid-in capital as a result of the USC Merger
$
5,908

 
$
—

 
$
—

Change from net income attributable to Shake Shack Inc. and transfers (to) from non-controlling interest
$
(57,129
)
 
$
2,118

 
$
5,423

EQUITY-BASED COMPENSATION (Tables)
Schedule of equity-based compensation expense recognized 
A summary of equity-based compensation expense recognized during fiscal 2015, 2014 and 2013 is as follows:
 
 
2015

 
2014

 
2013

Unit appreciation rights
$
11,762

 
$
—

 
$
—

Restricted Class B units
605

 
165

 
93

Stock options
4,314

 
—

 
—

Equity-based compensation expense
$
16,681

 
$
165

 
$
93

 
 
 
 
 
 
Total income tax benefit recognized related to equity-based compensation
$
482

 
$
4

 
$
2

Schedule of unit appreciation rights activity 
A summary of UAR activity for fiscal 2015 is as follows:
 
 
UARs

 
Weighted
Average
Base
Price

Outstanding at beginning of period
22,554

 
$
193.51

 
Granted
—

 
—

 
Forfeited
—

 
—

 
Vested and settled
(22,554
)
 
(193.51
)
Outstanding at end of period
—

 
$
—

Schedule of restricted class B activity 
A summary of restricted Class B unit activity for fiscal year ended December 30, 2015 is as follows:
 
 
Units

 
Weighted
Average
Grant Date
Fair Value

Outstanding at beginning of period
7,227

 
$
92.31

 
Granted
—

 
—

 
Vested
(7,227
)
 
(92.31
)
 
Forfeited
—

 
—

Outstanding at end of period
—

 
$
—

Schedule of fair value of stock options 
The fair value of stock option awards was determined on the grant date using the Black-Scholes valuation model based on the following weighted-average assumptions:
 
2015

Expected term (years)(1)
7.5

Expected volatility(2)
35.1
%
Risk-free interest rate(3)
1.6
%
Dividend yield(4)
—
%
(1)
Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method.
(2)
Expected volatility is based on the historical volatility of a selected peer group over a period equivalent to the expected term.
(3)
The risk-free rate rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term.
(4)
We have assumed a dividend yield of zero as we have no plans to declare dividends in the foreseeable future.
Schedule of stock options, activity 
A summary of stock option activity for fiscal 2015 is as follows:
 
 
Stock
Options

 
Weighted
Average
Exercise
Price

 
Aggregate Intrinsic Value

 
Weighted Average Remaining Contractual Life (Years)

Outstanding at beginning of period
—

 
$
—

 
 
 
 
 
Granted
2,622,281

 
21.00

 
 
 
 
 
Exercised
—

 
—

 
 
 
 
 
Forfeited
(47,300
)
 
(21.00
)
 
 
 
 
 
Expired
—

 
—

 
 
 
 
Outstanding at end of period
2,574,981

 
$
21.00

 
$
48,822

 
9.1

Options exercisable at end of period
—

 
$
—

 
$
—

 
—

Options expected to vest
2,469,372

 
$
21.00

 
$
46,819

 
9.1

Schedule of stock options outstanding and exercisable option plans 
The following table summarizes information about stock options outstanding and exercisable as December 30, 2015:
 
 
Options Outstanding
 
Options Exercisable
 
 
Number Outstanding at December 30, 2015

 
Weighted Average Remaining Contractual Life (Years)
 
Weighted Average Exercise Price

 
Number Exercisable at December 30, 2015

 
Weighted Average Remaining Contractual Life (Years)

 
Weighted Average Exercise Price

Range of Exercise Price
 
 
 
 
 
 
$21.00
 
2,574,981

 
9.1
 
$
21.00

 
—

 
—

 
$
—

INCOME TAXES (Tables)
Schedule of Income before Income Tax, Domestic and Foreign 
The components of income before income taxes are follows:
 
2015

 
2014

 
2013

Domestic
$
244

 
$
(3,007
)
 
$
2,364

Foreign
6,184

 
5,787

 
3,519

Income before income taxes
$
6,428

 
$
2,780

 
$
5,883

Schedule of Components of Income Tax Expense 
The components of income tax expense are as follows:
 
 
 
2015

 
2014

 
2013

Current income taxes:
 
 
 
 
 
 
Federal
$
2,474

 
$
—

 
$
—

 
State and local
1,131

 
194

 
266

 
Foreign
433

 
561

 
187

 
Total current income taxes
4,038

 
755

 
453

Deferred income taxes:
 
 
 
 
 
 
Federal
(267
)
 
—

 
—

 
State and local
(467
)
 
(93
)
 
7

 
Total deferred income taxes
(734
)
 
(93
)
 
7

Income tax expense
$
3,304

 
$
662

 
$
460

Reconciliation of income tax expense, US income tax rate 
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:
 
 
2015

 
2014

 
2013

Expected U.S. federal income taxes at statutory rate (34%)
$
2,186

 
$
945

 
$
2,000

State and local income taxes, net of federal benefit
663

 
101

 
176

Foreign withholding taxes
433

 
561

 
188

Non-deductible expenses
653

 
—

 
—

Tax credits
(141
)
 
—

 
—

Non-controlling interest
(490
)
 
—

 
—

LLC flow-through structure
—

 
(976
)
 
(1,904
)
Other
—

 
31

 
—

Income tax expense
$
3,304

 
$
662

 
$
460

Schedule of Deferred Tax Assets and Liabilities 
The components of deferred tax assets and liabilities are as follows:
 
 
 
December 30
2015

 
December 31
2014

Deferred tax assets:
 
 
 
 
Investment in partnership
$
154,649

 
$
—

 
Tax Receivable Agreement
69,513

 
—

 
Deferred rent
492

 
448

 
Deferred revenue
63

 
66

 
Stock-based compensation
218

 
—

 
Net operating loss carryforwards
334

 
—

 
Other assets
159

 
26

 
Total gross deferred tax assets
225,428

 
540

Valuation allowance
(23,155
)
 
—

Total deferred tax assets, net of valuation allowance
202,273

 
540

Deferred tax liabilities:
 
 
 
 
Property and equipment
(316
)
 
(379
)
 
Total gross deferred tax liabilities
(316
)
 
(379
)
Net deferred tax assets
$
201,957

 
$
161

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 fiscal 2015, 2014 and 2013.
 
 
 
2015

 
2014

 
2013

Numerator:
 
 
 
 
 
 
Net income
$
3,124

 
$
2,118

 
$
5,423

 
Less: net income attributable to non-controlling interests
11,900

 
—

 
—

 
Net income (loss) attributable to Shake Shack Inc.
$
(8,776
)
 
$
2,118

 
$
5,423

Denominator:
 
 
 
 
 
 
Weighted-average shares of Class A common stock outstanding—basic
13,588

 
29,977

 
29,934

 
Effect of dilutive securities:
 
 
 
 
 
 
 
Restricted Class B units
—

 
145

 
84

 
Weighted-average shares of Class A common stock outstanding—diluted
13,588

 
30,122

 
30,018

 
 
 
 
 
 
 
 
Earnings per share of Class A common stock—basic
$
(0.65
)
 
$
0.07

 
$
0.18

Earnings per share of Class A common stock—diluted
$
(0.65
)
 
$
0.07

 
$
0.18

SUPPLEMENTAL CASH FLOW INFORMATION (Tables)
Schedule of Cash Flow Information
The following table sets forth supplemental cash flow information for fiscal 2015, 2014 and 2013:
 
 
2015

 
2014

 
2013

Cash paid for:
 
 
 
 
 
 
Income taxes, net of refunds
$
416

 
$
836

 
$
639

 
Interest, net of amounts capitalized
92

 
123

 
19

Non-cash investing activities:
 
 
 
 
 
 
Accrued purchases of property and equipment
4,904

 
3,577

 
234

 
Property and equipment acquired through landlord incentives
—

 
6,000

 
—

 
Class A common stock issued in connection with the acquisition of the Former SSE Equity Owners
6

 
—

 
—

 
Class A common stock issued in connection with the USC Merger
2

 
—

 
—

Non-cash financing activities:
 
 
 
 
 
 
Cancellation of Class B common stock in connection with the Organizational Transactions
(6
)
 
—

 
—

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

 
—

 
—

 
Cancellation of Class B common stock in connection with the redemption of LLC Interests
(6
)
 
—

 
—

 
Cancellation of Class B common stock in connection with the USC Merger
(2
)
 
—

 
—

 
Establishment of liabilities under tax receivable agreement
173,090

 
—

 
—

GEOGRAPHIC INFORMATION (Tables)
Revenue from Customers by Geographic Areas
Revenue by geographic area for fiscal 2015, 2014 and 2013 is as follows:
 
 
2015

 
2014

 
2013

United States
$
184,408

 
$
112,743

 
$
78,937

Other countries
6,184

 
5,787

 
3,519

Total revenue
$
190,592

 
$
118,530

 
$
82,456

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables)
Schedule of Quarterly Financial Information
The following table sets forth certain unaudited financial information for each quarter of fiscal 2015 and fiscal 2014. The unaudited quarterly information includes all adjustments (consisting of normal recurring adjustments) that, in the opinion of management, are necessary for the fair presentation of the information presented. Operating results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year.
 
 
 
2015
 
 
 
First

 
Second

 
Third

 
Fourth

 
 
 
Quarter

 
Quarter

 
Quarter

 
Quarter

Total revenue
$
37,808

 
$
48,450

 
$
53,273

 
$
51,061

Operating income (loss)
(10,949
)
 
6,244

 
7,804

 
3,654

Net income (loss)
(11,260
)
 
5,145

 
6,193

 
3,046

Net income (loss) attributable to Shake Shack Inc.
(12,668
)
 
1,118

 
1,528

 
1,246

Earnings (loss) per share(1):
 
 
 
 
 
 
 
 
Basic
$
(1.06
)
 
$
0.09

 
$
0.11

 
$
0.08

 
Diluted
$
(1.06
)
 
$
0.08

 
$
0.10

 
$
0.07

 
 
 
2014
 
 
 
First

 
Second

 
Third

 
Fourth

 
 
 
Quarter

 
Quarter

 
Quarter

 
Quarter(2)

Total revenue
$
24,196

 
$
27,737

 
$
31,825

 
$
34,772

Operating income (loss)
1,229

 
2,142

 
759

 
(987
)
Net income (loss)
1,092

 
1,949

 
504

 
(1,427
)
Net income (loss) attributable to Shake Shack Inc.
1,092

 
1,949

 
504

 
(1,427
)
Earnings (loss) per share(1):
 
 
 
 
 
 
 
 
Basic
$
0.04

 
$
0.07

 
$
0.02

 
$
(0.05
)
 
Diluted
$
0.04

 
$
0.07

 
$
0.02

 
$
(0.05
)
(1)
Basic and diluted earnings per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted earnings per share amounts may not equal annual basic and diluted earnings per share amounts.
(2)
We operate on a 52/53 week fiscal year that ends on the last Wednesday of the calendar year. Fiscal 2014 was a 53-week year with the extra operating week falling in our fiscal fourth quarter. Fiscal 2015 contained 52 weeks.
NATURE OF OPERATIONS - Organization and Nature of Operations - Franchiser (Details)
Dec. 30, 2015
Restaurant
Franchisor Disclosure [Line Items]
 
Number of Restaurants
84 
Company-operated |
United States
 
Franchisor Disclosure [Line Items]
 
Number of Restaurants
44 
Licensed |
United States
 
Franchisor Disclosure [Line Items]
 
Number of Restaurants
5 
Licensed |
Other countries
 
Franchisor Disclosure [Line Items]
 
Number of Restaurants
35 
NATURE OF OPERATIONS - Initial Public Offering (Details) (Common stock, Class A Common Stock, USD $)
In Thousands, except Share data, unless otherwise specified
0 Months Ended 11 Months Ended
Feb. 4, 2015
Dec. 30, 2015
Class of Stock [Line Items]
 
 
Shares issued during the period
5,968,841 
5,750,000 
IPO
 
 
Class of Stock [Line Items]
 
 
Shares issued during the period
5,750,000 
 
Proceeds of issuance of initial public offering net of underwriting discounts and commissions
$ 112,298 
 
Over-allotment option
 
 
Class of Stock [Line Items]
 
 
Shares issued during the period
750,000 
 
NATURE OF OPERATIONS - Organizational Transactions (Details)
0 Months Ended 4 Months Ended 12 Months Ended 0 Months Ended 11 Months Ended 0 Months Ended 4 Months Ended
Feb. 4, 2015
business
Dec. 30, 2015
Dec. 30, 2015
Feb. 4, 2015
Feb. 4, 2015
Class A Common Stock
Feb. 4, 2015
Class A Common Stock
Common stock
Dec. 30, 2015
Class A Common Stock
Common stock
Feb. 4, 2015
Class B Common Stock
Feb. 4, 2015
Class B Common Stock
Common stock
Dec. 30, 2015
Class B Common Stock
Common stock
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
Ratio of common stock to limited liability company interest
 
 
 
 
1 
 
 
1 
 
 
Number of entities acquired
2 
 
 
 
 
 
 
 
 
 
Shares issued during the period
 
 
 
 
 
5,968,841 
5,750,000 
 
30,160,694 
 
LLC interests acquired
5,968,841 
2,848,035 
6,003,308 
 
 
 
 
 
 
 
Effect of redemption (shares)
 
 
 
 
 
 
 
 
5,968,841 
2,848,035 
Ownership percent of noncontrolling interest
 
54.60% 
54.60% 
33.30% 
 
 
 
 
 
 
Noncontrolling owners ownership percentage
 
45.40% 
45.40% 
66.70% 
 
 
 
 
 
 
NATURE OF OPERATIONS - Secondary Offering (Details) (USD $)
0 Months Ended 4 Months Ended 12 Months Ended 4 Months Ended 0 Months Ended 4 Months Ended 1 Months Ended 4 Months Ended 12 Months Ended 1 Months Ended
Feb. 4, 2015
Dec. 30, 2015
Dec. 30, 2015
Feb. 4, 2015
Dec. 30, 2015
Class A Common Stock
Common stock
Feb. 4, 2015
Class B Common Stock
Common stock
Dec. 30, 2015
Class B Common Stock
Common stock
Aug. 31, 2015
Secondary offering
Aug. 31, 2015
Secondary offering
Class A Common Stock
Common stock
Aug. 31, 2015
Secondary offering
Class B Common Stock
Common stock
Dec. 30, 2015
Limited Liability Company
Dec. 30, 2015
Limited Liability Company
Aug. 31, 2015
Limited Liability Company
Secondary offering
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Total shares offered
 
 
 
 
 
 
 
 
4,000,000 
 
 
 
 
Shares issued, share price (in dollars per share)
 
 
 
 
 
 
 
 
$ 60 
 
 
 
 
Units acquired during the period (shares)
5,968,841 
2,848,035 
6,003,308 
 
 
 
 
3,155,273 
 
 
 
 
 
Conversion of units from former equity owners (shares)
 
 
 
 
 
 
 
 
844,727 
 
 
 
 
Redemptions (shares)
 
 
 
 
2,848,035 
 
 
 
3,155,273 
 
 
 
 
Number of units redeemed (shares)
 
 
 
 
 
 
 
 
 
 
2,848,035 
6,003,308 
3,155,273 
Effect of redemption (shares)
 
 
 
 
 
5,968,841 
2,848,035 
 
 
3,155,273 
 
 
 
Ownership percent of noncontrolling interest
 
54.60% 
54.60% 
33.30% 
 
 
 
 
 
 
 
 
 
Noncontrolling owners ownership percentage
 
45.40% 
45.40% 
66.70% 
 
 
 
 
 
 
 
 
 
NATURE OF OPERATIONS - Redemption (Details)
0 Months Ended 4 Months Ended 12 Months Ended 0 Months Ended 11 Months Ended 0 Months Ended 4 Months Ended 1 Months Ended
Feb. 4, 2015
Dec. 30, 2015
Dec. 30, 2015
Feb. 4, 2015
Class A Common Stock
Common stock
Dec. 30, 2015
Class A Common Stock
Common stock
Feb. 4, 2015
Class B Common Stock
Common stock
Dec. 30, 2015
Class B Common Stock
Common stock
Dec. 30, 2015
USC Merger
Dec. 30, 2015
USC Merger
Class A Common Stock
Common stock
Dec. 30, 2015
USC Merger
Class B Common Stock
Common stock
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
Shares issued during the period
 
 
 
5,968,841 
5,750,000 
30,160,694 
 
 
1,727,804 
 
Effect of redemption (shares)
 
 
 
 
 
5,968,841 
2,848,035 
 
 
1,727,804 
Units acquired during the period (shares)
5,968,841 
2,848,035 
6,003,308 
 
 
 
 
1,727,804 
 
 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fiscal Year (Details)
12 Months Ended
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Accounting Policies [Abstract]
 
 
 
Fiscal period duration
364 days 
371 days 
364 days 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Segment Reporting (Details)
12 Months Ended
Dec. 30, 2015
reportable_segment
operating_segment
Accounting Policies [Abstract]
 
Number of operating segments
1 
Number of reportable segments
1 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) (USD $)
12 Months Ended
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Property, Plant and Equipment [Line Items]
 
 
 
Impairment charges
$ 0 
$ 0 
$ 0 
Equipment |
Minimum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life of asset
3 years 
 
 
Equipment |
Maximum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life of asset
7 years 
 
 
Furniture and fixtures |
Minimum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life of asset
3 years 
 
 
Furniture and fixtures |
Maximum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life of asset
7 years 
 
 
Computer equipment and software |
Minimum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life of asset
3 years 
 
 
Computer equipment and software |
Maximum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life of asset
7 years 
 
 
Leasehold improvements |
Minimum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life of asset
10 years 
 
 
Leasehold improvements |
Maximum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life of asset
20 years 
 
 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Other Assets (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 30, 2015
Dec. 31, 2014
Accounting Policies [Abstract]
 
 
Indefinite-lived intangible assets
$ 701 
$ 701 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Leases (Details)
12 Months Ended
Dec. 30, 2015
renewal_option
Operating Leased Assets [Line Items]
 
Number of renewal options
2 
Period of renewal term
5 years 
Minimum
 
Operating Leased Assets [Line Items]
 
Terms of lease contract
10 years 
Maximum
 
Operating Leased Assets [Line Items]
 
Terms of lease contract
20 years 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Income Taxes (Details) (USD $)
Dec. 30, 2015
Dec. 31, 2014
Accounting Policies [Abstract]
 
 
Valuation allowance
$ 23,155,000 
$ 0 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Advertising (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Accounting Policies [Abstract]
 
 
 
Advertising and promotions
$ 1,646 
$ 1,166 
$ 794 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recently Issued Accounting Pronouncements (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 30, 2015
Dec. 31, 2014
New Accounting Pronouncement, Early Adoption [Line Items]
 
 
Deferred income taxes, net
$ 201,957 
$ 161 
New Accounting Pronouncement, Early Adoption, Effect
 
 
New Accounting Pronouncement, Early Adoption [Line Items]
 
 
Current deferred tax asset
 
20 
Deferred income taxes, net
 
$ 20 
FAIR VALUE MEASUREMENTS - Cash, Cash Equivalents and Marketable Securities (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Dec. 26, 2012
Schedule of Available-for-sale Securities [Line Items]
 
 
 
 
Cash cost basis
$ 70,849 
$ 2,677 
$ 13,076 
$ 16,033 
Cash and cash equivalents fair value
70,849 
 
 
 
Gross Unrealized Gains
1 
 
 
 
Gross Unrealized Losses
(12)
 
 
 
Fair value of marketable securities
2,386 
0 
 
 
Total cost basis
73,246 
 
 
 
Total fair value
73,235 
 
 
 
Fair Value, Inputs, Level 2 |
Corporate debt securities
 
 
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
 
 
Marketable securities cost Basis
2,397 
 
 
 
Gross Unrealized Gains
1 
 
 
 
Gross Unrealized Losses
(12)
 
 
 
Fair value of marketable securities
2,386 
 
 
 
Cash
 
 
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
 
 
Cash cost basis
70,816 
 
 
 
Cash and cash equivalents fair value
70,816 
 
 
 
Money market funds |
Fair Value, Inputs, Level 1
 
 
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
 
 
Cash cost basis
33 
 
 
 
Cash and cash equivalents fair value
$ 33 
 
 
 
FAIR VALUE MEASUREMENTS - Additional Information (Details) (USD $)
12 Months Ended
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Fair Value Disclosures [Abstract]
 
 
 
Fair Value
$ 2,386,000 
$ 0 
 
Impairment charges
0 
0 
0 
Interest income
7,000 
 
 
Realized gains (loss) on available-for-sale securities
0 
 
 
Unrealized holding losses on available-for-sale securities
$ (11,000)
 
 
FAIR VALUE MEASUREMENTS - Estimated Fair Value of Investments (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 30, 2015
Fair Value Disclosures [Abstract]
 
Due within one year
$ 275 
Due after one year through 5 years
2,111 
Due after 5 years through 10 years
0 
Due after 10 years
0 
Total
$ 2,386 
ACCOUNTS RECEIVABLE (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 30, 2015
Dec. 31, 2014
Receivables [Abstract]
 
 
Landlord receivables
$ 1,380 
$ 1,088 
Licensing receivables
1,669 
822 
Credit card receivables
1,023 
660 
Other receivables
145 
708 
Accounts receivable
$ 4,217 
$ 3,278 
ACCOUNTS RECEIVABLE - Additional Information (Details) (USD $)
Dec. 30, 2015
Dec. 31, 2014
Receivables [Abstract]
 
 
Allowance for doubtful accounts
$ 0 
$ 0 
INVENTORIES (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 30, 2015
Dec. 31, 2014
Inventory [Line Items]
 
 
Inventories
$ 543 
$ 529 
Food
 
 
Inventory [Line Items]
 
 
Inventories
328 
354 
Wine
 
 
Inventory [Line Items]
 
 
Inventories
30 
28 
Beer
 
 
Inventory [Line Items]
 
 
Inventories
46 
33 
Beverages
 
 
Inventory [Line Items]
 
 
Inventories
57 
42 
Retail merchandise
 
 
Inventory [Line Items]
 
 
Inventories
$ 82 
$ 72 
PROPERTY AND EQUIPMENT (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
$ 116,560 
$ 83,467 
 
Less: accumulated depreciation
(23,519)
(13,343)
 
Property and equipment, net
93,041 
70,124 
 
Depreciation
10,222 
5,809 
3,541 
Leasehold improvements
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
82,904 
58,272 
 
Equipment
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
16,903 
12,108 
 
Furniture and fixtures
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
4,965 
3,249 
 
Computer equipment and software
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
5,197 
3,529 
 
Construction in progress
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
$ 6,591 
$ 6,309 
 
SUPPLEMENTAL BALANCE SHEET INFORMATION - (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 30, 2015
Dec. 31, 2014
Supplemental Balance Sheet Disclosures [Abstract]
 
 
Sales tax payable
$ 1,073 
$ 736 
Current portion of liabilities under tax receivable agreement
2,157 
0 
Gift card liability
833 
625 
Other
551 
388 
Other current liabilities
$ 4,614 
$ 1,749 
DEBT (Details) (USD $)
12 Months Ended 12 Months Ended 0 Months Ended 1 Months Ended 12 Months Ended 0 Months Ended
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Dec. 30, 2015
Notes payable
Dec. 31, 2014
Notes payable
Mar. 31, 2013
Notes payable
Dec. 30, 2015
Letter of credit
Feb. 4, 2015
Revolving Credit Facility
Line of credit
Feb. 28, 2015
Revolving Credit Facility
Line of credit
Dec. 30, 2015
Revolving Credit Facility
Line of credit
Feb. 4, 2015
Revolving Credit Facility
Line of credit
Dec. 31, 2014
Revolving Credit Facility
Line of credit
Feb. 4, 2015
Revolving Credit Facility
Letter of credit
Line of credit
Dec. 30, 2015
Revolving Credit Facility
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
Dec. 30, 2015
Office building
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
 
 
 
 
 
 
 
 
$ 50,000,000 
 
$ 10,000,000 
 
 
 
 
 
 
Current borrowing capacity
 
 
 
 
 
 
 
 
 
 
20,000,000 
 
 
 
 
 
 
 
 
letter of credit outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 
32,000,000 
 
 
 
 
 
 
 
0 
 
32,000,000 
 
 
 
 
 
 
 
Line of Credit Facility, Remaining Borrowing Capacity
 
 
 
 
 
 
 
 
 
 
 
 
 
19,920,000 
 
 
 
 
 
Proceeds from revolving credit facility
4,000,000 
32,000,000 
0 
 
 
 
 
 
 
4,000,000 
 
 
 
 
 
 
 
 
 
Payments on revolving credit facility
36,000,000 
0 
0 
 
 
 
 
 
36,000,000 
 
 
 
 
 
 
 
 
 
 
Notes payable face amount
 
 
 
 
 
313,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stated interest rate
 
 
 
 
 
5.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes payable
313,000 
313,000 
 
313,000 
313,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest costs incurred
440,000 
365,000 
56,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest costs capitalized
$ 108,000 
$ 0 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LEASES - Narrative (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Leases [Abstract]
 
 
 
Common area maintenance costs, real estate taxes, and other occocupancy costs not included in rent expense
$ 2,119 
$ 1,111 
$ 758 
LEASES - Summary of Rent Expense (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Leases [Abstract]
 
 
 
Minimum rent
$ 10,796 
$ 6,497 
$ 4,507 
Deferred rent
1,482 
2,830 
975 
Contingent rent
2,959 
1,883 
1,626 
Total rent expense
$ 15,237 
$ 11,210 
$ 7,108 
LEASES - Schedule of Future Minimum Lease Payments (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 30, 2015
Leases [Abstract]
 
2016
$ 14,199 
2017
15,664 
2018
16,329 
2019
16,507 
2020
15,982 
Thereafter
97,415 
Total minimum lease payments
$ 176,096 
EMPLOYEE BENEFIT PLANS - Deferred Compensation (Details) (Executive, Deferred Bonus, USD $)
1 Months Ended 12 Months Ended
Oct. 31, 2015
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Executive |
Deferred Bonus
 
 
 
 
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
 
 
 
 
Deferred compensation award due to executive
 
 
 
$ 2,450,000 
Deferred compensation expense
 
0 
0 
2,054,000 
Deferred Compensation Arrangement with Individual, Employer Contribution
$ 2,450,000 
 
 
 
EMPLOYEE BENEFIT PLANS - Defined Contribution Plan (Details) (USD $)
12 Months Ended
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Employer contributions
$ 238,000 
$ 132,000 
$ 0 
Defined Contribution Plan, Initial Contribution
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Employer matching contribution percentage
100.00% 
 
 
Employer matching contribution as a percent of employees' gross pay
3.00% 
 
 
Defined Contribution Plan, Additional Contribution
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Employer matching contribution percentage
50.00% 
 
 
Employer matching contribution as a percent of employees' gross pay
3.00% 
 
 
Defined Contribution Plan, Additional Contribution |
Maximum
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Employer matching contribution as a percent of employees' gross pay
5.00% 
 
 
STOCKHOLDER'S EQUITY (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
0 Months Ended 4 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 1 Months Ended 0 Months Ended 4 Months Ended 11 Months Ended 0 Months Ended 4 Months Ended 0 Months Ended 0 Months Ended 1 Months Ended 11 Months Ended 1 Months Ended 11 Months Ended 4 Months Ended 12 Months Ended 1 Months Ended
Feb. 4, 2015
board_of_director_class
Dec. 15, 2014
Dec. 30, 2015
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Feb. 4, 2015
Feb. 4, 2015
Class A Common Stock
Dec. 30, 2015
Class A Common Stock
Feb. 4, 2015
Class A Common Stock
Feb. 4, 2015
Class B Common Stock
Dec. 30, 2015
Class B Common Stock
Feb. 4, 2015
Class B Common Stock
Aug. 31, 2015
Secondary offering
Dec. 30, 2015
USC Merger
Feb. 4, 2015
Common stock
Class A Common Stock
Dec. 30, 2015
Common stock
Class A Common Stock
Dec. 30, 2015
Common stock
Class A Common Stock
Feb. 4, 2015
Common stock
Class B Common Stock
Dec. 30, 2015
Common stock
Class B Common Stock
Feb. 4, 2015
Common stock
IPO
Class A Common Stock
Feb. 4, 2015
Common stock
IPO
Class A Common Stock
Feb. 4, 2015
Common stock
Over-allotment option
Class A Common Stock
Aug. 31, 2015
Common stock
Secondary offering
Class A Common Stock
Aug. 31, 2015
Common stock
Secondary offering
Class B Common Stock
Dec. 30, 2015
Common stock
USC Merger
Class A Common Stock
Dec. 30, 2015
Common stock
USC Merger
Class A Common Stock
Dec. 30, 2015
Common stock
USC Merger
Class B Common Stock
Dec. 30, 2015
Common stock
USC Merger
Class B Common Stock
Dec. 30, 2015
Limited Liability Company
Dec. 30, 2015
Limited Liability Company
Aug. 31, 2015
Limited Liability Company
Secondary offering
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock, shares authorized
 
 
 
 
100 
 
 
 
200,000,000 
200,000,000 
 
35,000,000 
35,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock par value (in dollars per share)
 
 
 
 
$ 0.01 
 
 
 
$ 0.001 
$ 0.001 
 
$ 0.001 
$ 0.001 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock, shares authorized
 
 
10,000,000 
10,000,000 
 
 
10,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of classes of directors
3 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Board of directors, term
3 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of votes per share
1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratio of common stock to limited liability company interest
 
 
 
 
 
 
 
1 
 
 
1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares issued during the period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,968,841 
 
5,750,000 
30,160,694 
 
5,750,000 
 
750,000 
 
 
1,727,804 
 
 
 
 
 
 
Proceeds of issuance of initial public offering net of underwriting discounts and commissions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 112,298 
 
 
 
 
 
 
 
 
 
 
 
Shares issued, share price (in dollars per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 21 
 
$ 60 
 
 
 
 
 
 
 
 
Total conversion of units (shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,000,000 
 
 
 
 
 
 
 
 
Conversion of units from former equity owners (shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
844,727 
 
 
 
 
 
 
 
 
Redemptions (shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,848,035 
 
 
 
 
 
 
3,155,273 
 
 
1,727,804 
 
(1,727,804)
 
 
 
LLC interests acquired
5,968,841 
 
2,848,035 
6,003,308 
 
 
 
 
 
 
 
 
 
3,155,273 
1,727,804 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of units redeemed (shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,848,035 
6,003,308 
3,155,273 
Effect of redemption (shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,968,841 
2,848,035 
 
 
 
 
3,155,273 
 
 
1,727,804 
 
 
 
 
Member distribution threshold, percentage
 
27.30% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Member distributions
 
 
 
$ 11,125 
$ 27,070 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NON-CONTROLLING INTERESTS - Narrative (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
0 Months Ended 4 Months Ended 12 Months Ended 0 Months Ended 11 Months Ended 12 Months Ended 1 Months Ended 11 Months Ended
Feb. 4, 2015
Dec. 30, 2015
Dec. 30, 2015
Feb. 4, 2015
Feb. 4, 2015
Class A Common Stock
Common stock
Dec. 30, 2015
Class A Common Stock
Common stock
Dec. 30, 2015
Class A Common Stock
Common stock
Aug. 31, 2015
Secondary offering
Dec. 30, 2015
USC Merger
Dec. 30, 2015
USC Merger
Dec. 30, 2015
USC Merger
Class A Common Stock
Common stock
Dec. 30, 2015
Limited Liability Company
Dec. 30, 2015
Immaterial Errors Related to Noncontrolling Interest
Restatement Adjustment
Noncontrolling Interest [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Units purchased during the period (shares)
5,750,000 
 
 
 
 
 
 
 
 
 
 
 
 
Units acquired during the period (shares)
5,968,841 
2,848,035 
6,003,308 
 
 
 
 
3,155,273 
1,727,804 
 
 
 
 
LLC interests issued for share-based compensation (shares)
339,306 
 
 
 
 
 
 
 
 
 
 
 
 
Issuance of class A common stock in settlement of unit appreciation rights (shares)
 
 
 
 
339,306 
339,306 
339,306 
 
 
 
 
 
 
Redemption of LLC Interests in connection with the secondary offering
 
 
 
 
 
 
 
 
 
$ 0 
$ 2 
 
 
Partners' Capital Account (shares)
 
 
 
 
 
 
 
 
 
 
 
36,250,000 
 
Number of LLC interests (shares)
 
 
19,789,259 
 
 
 
 
 
 
 
 
 
 
Ownership percent of noncontrolling interest
 
54.60% 
54.60% 
33.30% 
 
 
 
 
 
 
 
 
 
Non-controlling interests
 
56,404 
56,404 
 
 
 
 
 
 
 
 
 
63,407 
Decrease in additional paid-in capital
 
96,311 
96,311 
 
 
 
 
 
 
 
 
 
(64,785)
Retained earnings
 
$ 4,273 
$ 4,273 
 
 
 
 
 
 
 
 
 
$ 1,278 
NON-CONTROLLING INTERESTS - Schedule of non-controlling interest (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 11 Months Ended 12 Months Ended
Dec. 30, 2015
Sep. 30, 2015
Jul. 1, 2015
Apr. 1, 2015
Dec. 31, 2014
Sep. 24, 2014
Jun. 25, 2014
Mar. 26, 2014
Dec. 30, 2015
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Noncontrolling Interest [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Shake Shack Inc.
$ 1,246 
$ 1,528 
$ 1,118 
$ (12,668)
$ (1,427)
$ 504 
$ 1,949 
$ 1,092 
 
$ (8,776)
$ 2,118 
$ 5,423 
Increase in additional paid-in capital as a result of the USC Merger
 
 
 
 
 
 
 
 
109,262 
 
 
 
Change from net income attributable to Shake Shack Inc. and transfers (to) from non-controlling interest
 
 
 
 
 
 
 
 
 
(57,129)
2,118 
5,423 
IPO And Organizational Transaction
 
 
 
 
 
 
 
 
 
 
 
 
Noncontrolling Interest [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in additional paid in capital
 
 
 
 
 
 
 
 
 
(75,182)
0 
0 
Secondary Offering and Redemption of Units
 
 
 
 
 
 
 
 
 
 
 
 
Noncontrolling Interest [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in additional paid in capital
 
 
 
 
 
 
 
 
 
19,934 
0 
0 
USC Merger
 
 
 
 
 
 
 
 
 
 
 
 
Noncontrolling Interest [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in additional paid in capital
 
 
 
 
 
 
 
 
 
5,908 
0 
0 
Unit appreciation rights
 
 
 
 
 
 
 
 
 
 
 
 
Noncontrolling Interest [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in additional paid in capital
 
 
 
 
 
 
 
 
 
987 
0 
0 
Additional Paid-In Capital
 
 
 
 
 
 
 
 
 
 
 
 
Noncontrolling Interest [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Increase in additional paid-in capital as a result of the USC Merger
 
 
 
 
 
 
 
 
$ 109,256 
 
 
 
EQUITY-BASED COMPENSATION - Schedule of compensation expense recognized (Details) (USD $)
12 Months Ended
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Equity-based compensation expense
$ 16,681,000 
$ 165,000 
$ 93,000 
Total income tax benefit recognized related to equity-based compensation
482,000 
4,000 
2,000 
Unit appreciation rights
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Equity-based compensation expense
11,762,000 
0 
0 
Stock options
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Equity-based compensation expense
$ 4,314,000 
$ 0 
$ 0 
EQUITY-BASED COMPENSATION - Narrative (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended 1 Months Ended 0 Months Ended 11 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Dec. 30, 2015
LLC interests
Dec. 30, 2015
Unit appreciation rights
Dec. 31, 2014
Unit appreciation rights
Dec. 25, 2013
Unit appreciation rights
Dec. 30, 2015
Restricted Class B units
Dec. 31, 2014
Restricted Class B units
Dec. 25, 2013
Restricted Class B units
Dec. 30, 2015
Stock options
Dec. 31, 2014
Stock options
Dec. 25, 2013
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
Stock options
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
Dec. 30, 2015
Common stock
Class A Common Stock
Dec. 30, 2015
Common stock
Class A Common Stock
Dec. 30, 2015
Pro forma
LLC interests
Feb. 3, 2015
Unit Appreciation Rights Plan
Unit appreciation rights
Dec. 30, 2015
Unit Appreciation Rights Plan
Unit appreciation rights
Dec. 30, 2015
Unit Appreciation Rights Plan
Pro forma
LLC interests
Dec. 30, 2015
2015 Incentive Award Plan
Dec. 31, 2014
2015 Incentive Award Plan
Dec. 25, 2013
2015 Incentive Award Plan
Dec. 30, 2015
2015 Incentive Award Plan
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares available for grant
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,865,522 
 
 
 
 
 
 
 
31,303 
 
 
 
 
 
 
Contractual term
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10 years 
 
 
 
 
 
 
Equity-based compensation expense
$ 16,681 
$ 165 
$ 93 
 
$ 11,762 
$ 0 
$ 0 
$ 605 
$ 165 
$ 93 
$ 4,314 
$ 0 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unit appreciation rights vested and settled
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22,554 
767,947 
 
 
 
 
Weighted average base price of unit appreciation rights vested and settled (in USD per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ (193.51)
$ 5.68 
 
 
 
 
IPO qualifying transaction price (in USD per share)
 
 
 
$ 715.02 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issuance of class A common stock in settlement of unit appreciation rights (shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
339,306 
339,306 
339,306 
 
 
 
 
 
 
 
 
Award vesting period
 
 
 
 
 
 
 
 
 
 
 
 
 
3 years 
5 years 
 
 
1 year 
5 years 
 
 
 
 
 
 
 
 
 
 
 
Granted (in USD per share)
 
 
 
 
 
 
 
$ 0.00 
$ 0.00 
$ 92.31 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of restricted Class B units vested in the period
 
 
 
 
 
 
 
667 
167 
450 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restricted class B units vested
 
 
 
 
 
 
 
7,227 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
158,251 
 
 
 
 
 
 
 
Restricted class B units weighted average grant date fair value vested (in USD per share)
 
 
 
 
 
 
 
$ 92.31 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 4.22 
 
 
 
 
 
 
 
Stock options granted in the period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,622,281 
 
 
 
 
 
 
 
 
 
 
2,622,281 
0 
0 
 
Weighted average exercise price for stock options granted (in USD per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 21.00 
 
 
 
 
 
 
 
 
 
$ 21.00 
 
 
 
Dividend yield
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.00% 
Weighted average grant date fair value of stock options (in USD per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 8.53 
 
 
 
Stock options outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,574,981 
0 
 
 
Stock options exercisable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 
 
 
 
Unrecognized compensation expense (USD)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 17,937 
 
 
 
Weighted-average period for recognition compensation expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4 years 1 month 
EQUITY-BASED COMPENSATION - Schedule of Unit Appreciation Rights (Details) (Unit Appreciation Rights Plan, Unit appreciation rights vested and settled, USD $)
12 Months Ended
Dec. 30, 2015
Unit Appreciation Rights Plan |
Unit appreciation rights vested and settled
 
UARs
 
Outstanding at beginning of period (in shares)
22,554 
Granted (in shares)
0 
Forfeited (in shares)
0 
Vested and settled (in shares)
(22,554)
Outstanding at end of period (in shares)
0 
Weighted Average Base Price
 
Outstanding at beginning of period (in USD per share)
$ 193.51 
Granted (in USD per share)
$ 0.00 
Forfeited (in USD per share)
$ 0.00 
Vested and settled (in USD per share)
$ (193.51)
Outstanding at end of period (in USD per share)
$ 0.00 
EQUITY-BASED COMPENSATION - Schedule of Restricted Class B Stock (Details) (Restricted Class B units, USD $)
12 Months Ended
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Restricted Class B units
 
 
 
Units
 
 
 
Outstanding at beginning of period (in shares)
7,227 
 
 
Granted (in shares)
0 
 
 
Vested (in shares)
(7,227)
 
 
Forfeited (in shares)
0 
 
 
Outstanding at beginning of period (in shares)
0 
7,227 
 
Weighted Average Grant Date Fair Value
 
 
 
Outstanding at beginning of period (in USD per share)
$ 92.31 
 
 
Granted (in USD per share)
$ 0.00 
$ 0.00 
$ 92.31 
Vested (in USD per share)
$ (92.31)
 
 
Forfeited (in USD per share)
$ 0.00 
 
 
Outstanding at end of period (in USD per share)
$ 0.00 
$ 92.31 
 
EQUITY-BASED COMPENSATION - Schedule of Fair Value of Stock Options (Details) (2015 Incentive Award Plan, Stock options)
12 Months Ended
Dec. 30, 2015
2015 Incentive Award Plan |
Stock options
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Expected term (years)
7 years 6 months 
Expected volatility
35.10% 
Risk-free interest rate
1.60% 
Dividend yield
0.00% 
EQUITY-BASED COMPENSATION - Schedule of Stock Options (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Stock Options
 
 
 
Expired (in shares)
0 
 
 
Weighted Average Exercise Price
 
 
 
Expired (in USD per share)
$ 0.00 
 
 
2015 Incentive Award Plan
 
 
 
Stock Options
 
 
 
Outstanding at beginning of period (in shares)
0 
 
 
Granted (in shares)
2,622,281 
0 
0 
Exercised (in shares)
0 
 
 
Forfeited (in shares)
(47,300)
 
 
Outstanding at end of period (in shares)
2,574,981 
0 
 
Options exercisable at end of period (in shares)
0 
 
 
Options expected to vest (in shares)
2,469,372 
 
 
Weighted Average Exercise Price
 
 
 
Outstanding at beginning of period (in USD per share)
$ 0.00 
 
 
Granted (in USD per share)
$ 21.00 
 
 
Exercised (in USD per share)
$ 0.00 
 
 
Forfeited (in USD per share)
$ (21.00)
 
 
Outstanding at end of period (in USD per share)
$ 21.00 
$ 0.00 
 
Options exercisable at end of year (in USD per share)
$ 0.00 
 
 
Options expected to vest (in USD per share)
$ 21.00 
 
 
Aggregate Intrinsic Value
 
 
 
Outstanding at end of period
$ 48,822 
 
 
Options exercisable at end of period
0 
 
 
Options expected to vest
$ 46,819 
 
 
Weighted Average Remaining Contractual Life (Years)
 
 
 
Outstanding at end of period
9 years 1 month 
 
 
Options exercisable at end of year
0 years 
 
 
Options expected to vest
9 years 1 month 
 
 
EQUITY-BASED COMPENSATION - Stock Options Outstanding and Exercisable (Details) (2015 Incentive Award Plan, USD $)
12 Months Ended
Dec. 30, 2015
Range of Exercise Price
 
Range of exercise price - Lower range limit
$ 21 
Range of exercise price - Upper range limit
$ 21 
Twenty-One Dollars
 
Options Outstanding
 
Number Outstanding (in shares)
2,574,981 
Weighted Average Remaining Contractual Life (Years)
9 years 1 month 
Weighted Average Exercise Price (in USD per share)
$ 21.00 
Options Exercisable
 
Number Exercisable (in shares)
0 
Weighted Average Remaining Contractual Life (Years)
0 years 
Weighted Average Exercise Price (in USD per share)
$ 0.00 
INCOME TAXES - Schedule of Components of Income before Income Taxes (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Income Tax Disclosure [Abstract]
 
 
 
Domestic
$ 244 
$ (3,007)
$ 2,364 
Foreign
6,184 
5,787 
3,519 
Income before income taxes
$ 6,428 
$ 2,780 
$ 5,883 
INCOME TAXES - Schedule of Components of Income Tax Expense (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Current income taxes:
 
 
 
Federal
$ 2,474 
$ 0 
$ 0 
State and local
1,131 
194 
266 
Foreign
433 
561 
187 
Total current income taxes
4,038 
755 
453 
Deferred income taxes:
 
 
 
Federal
(267)
0 
0 
State and local
(467)
(93)
7 
Total deferred income taxes
(734)
(93)
7 
Income tax expense
$ 3,304 
$ 662 
$ 460 
INCOME TAXES - Reconciliation of Income Tax Expense (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Income Tax Disclosure [Abstract]
 
 
 
U.S. federal statutory income tax rate
34.00% 
34.00% 
34.00% 
Income taxes at U.S. federal statutory rate
$ 2,186 
$ 945 
$ 2,000 
State and local income taxes, net of federal benefit
663 
101 
176 
Foreign withholding taxes
433 
561 
188 
Non-deductible expenses
653 
0 
0 
Tax credits
(141)
0 
0 
Non-controlling interest
(490)
0 
0 
LLC flow-through structure
0 
(976)
(1,904)
Other
0 
31 
0 
Income tax expense
$ 3,304 
$ 662 
$ 460 
INCOME TAXES- Schedule of Deferred Tax Assets and Liabilities (Details) (USD $)
Dec. 30, 2015
Dec. 31, 2014
Deferred tax assets:
 
 
Investment in partnership
$ 154,649,000 
$ 0 
Tax Receivable Agreement
69,513,000 
0 
Deferred rent
492,000 
448,000 
Deferred revenue
63,000 
66,000 
Stock-based compensation
218,000 
0 
Net operating loss carryforwards
334,000 
0 
Other assets
159,000 
26,000 
Total gross deferred tax assets
225,428,000 
540,000 
Valuation allowance
(23,155,000)
0 
Total deferred tax assets, net of valuation allowance
202,273,000 
540,000 
Deferred tax liabilities:
 
 
Property and equipment
(316,000)
(379,000)
Total gross deferred tax liabilities
(316,000)
(379,000)
Net deferred tax assets
$ 201,957,000 
$ 161,000 
INCOME TAXES - (Narrative) (Details) (USD $)
0 Months Ended 4 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 4 Months Ended 12 Months Ended 1 Months Ended
Feb. 4, 2015
Dec. 30, 2015
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Aug. 31, 2015
Secondary offering
Dec. 30, 2015
Pro forma
Dec. 30, 2015
Limited Liability Company
Dec. 30, 2015
Limited Liability Company
Aug. 31, 2015
Limited Liability Company
Secondary offering
Dec. 30, 2015
Immaterial Errors Related to Deferred Income Taxes and Liabilities
Restatement Adjustment
Income Tax Contingency [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Effective income tax rate (percent)
 
 
51.40% 
23.80% 
7.80% 
 
27.80% 
 
 
 
 
Net operating loss carryforwards
 
$ 334,000 
$ 334,000 
$ 0 
 
 
 
 
 
 
 
Number of LLC interests (shares)
 
 
19,789,259 
 
 
 
 
 
 
 
 
Investment in partnership
 
154,649,000 
154,649,000 
0 
 
 
 
 
 
 
 
Valuation allowance
 
(23,155,000)
(23,155,000)
0 
 
 
 
 
 
 
 
Deferred tax asset, tax receivable agreement
 
69,513,000 
69,513,000 
0 
 
 
 
 
 
 
 
Increase (decrease) in valuation allowance
 
 
23,155,000 
0 
 
 
 
 
 
 
 
Deferred income taxes
 
201,957,000 
201,957,000 
161,000 
 
 
 
 
 
 
15,043,000 
Tax receivable agreement liability
 
173,090,000 
173,090,000 
 
 
 
 
 
 
 
12,045,000 
Additional paid-in capital
 
96,311,000 
96,311,000 
 
 
 
 
 
 
 
4,026,000 
Uncertain tax positions
 
0 
0 
0 
 
 
 
 
 
 
 
Percentage of tax benefits due to equity owners
 
85.00% 
85.00% 
 
 
 
 
 
 
 
 
Percentage of tax benefits expected to be realized
 
15.00% 
15.00% 
 
 
 
 
 
 
 
 
Member distributions
 
 
11,125,000 
27,070,000 
0 
 
 
 
 
 
 
LLC interests acquired
5,968,841 
2,848,035 
6,003,308 
 
 
3,155,273 
 
 
 
 
 
Number of units redeemed (shares)
 
 
 
 
 
 
 
2,848,035 
6,003,308 
3,155,273 
 
Current portion of liabilities under tax receivable agreement
 
$ 2,157,000 
$ 2,157,000 
$ 0 
 
 
 
 
 
 
 
EARNINGS PER SHARE - Narrative (Details)
0 Months Ended 11 Months Ended 12 Months Ended
Feb. 4, 2015
Dec. 30, 2015
Dec. 30, 2015
Stock options
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Antidilutive shares
 
 
2,574,981 
Class B Common Stock
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Antidilutive shares
 
 
16,460,741 
Common stock |
Class A Common Stock
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Shares issued during the period
5,968,841 
5,750,000 
 
Issuance of class A common stock in settlement of unit appreciation rights (shares)
339,306 
339,306 
339,306 
IPO |
Common stock |
Class A Common Stock
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Shares issued during the period
5,750,000 
 
 
EARNINGS PER SHARE - Schedule of Earnings Per Share (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
1 Months Ended 3 Months Ended 11 Months Ended 12 Months Ended
Feb. 3, 2015
Dec. 30, 2015
Sep. 30, 2015
Jul. 1, 2015
Apr. 1, 2015
Dec. 31, 2014
Sep. 24, 2014
Jun. 25, 2014
Mar. 26, 2014
Dec. 30, 2015
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
$ (13,049)
$ 3,046 
$ 6,193 
$ 5,145 
$ (11,260)
$ (1,427)
$ 504 
$ 1,949 
$ 1,092 
$ 16,173 
$ 3,124 
$ 2,118 
$ 5,423 
Less: net income attributable to non-controlling interests
 
 
 
 
 
 
 
 
 
 
11,900 
0 
0 
Net income (loss) attributable to Shake Shack Inc.
 
$ 1,246 
$ 1,528 
$ 1,118 
$ (12,668)
$ (1,427)
$ 504 
$ 1,949 
$ 1,092 
 
$ (8,776)
$ 2,118 
$ 5,423 
Denominator:
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average shares of Class A common stock outstanding—basic (shares)
 
 
 
 
 
 
 
 
 
 
13,588 1
29,977 1
29,934 1
Effect of dilutive securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average shares of Class A common stock outstanding—diluted (shares)
 
 
 
 
 
 
 
 
 
 
13,588 1
30,122 1
30,018 1
Earnings per share of Class A common stock—basic (in dollars per share)
 
 
 
 
 
 
 
 
 
 
$ (0.65)1
$ 0.07 1
$ 0.18 1
Earnings per share of Class A common stock—diluted (in dollars per share)
 
 
 
 
 
 
 
 
 
 
$ (0.65)1
$ 0.07 1
$ 0.18 1
Restricted Class B Units
 
 
 
 
 
 
 
 
 
 
 
 
 
Effect of dilutive securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Restricted Class B units (shares)
 
 
 
 
 
 
 
 
 
 
0 
145 
84 
SUPPLEMENTAL CASH FLOW INFORMATION (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Cash paid for:
 
 
 
Income taxes, net of refunds
$ 416 
$ 836 
$ 639 
Interest, net of amounts capitalized
92 
123 
19 
Non-cash investing activities:
 
 
 
Accrued purchases of property and equipment
4,904 
3,577 
234 
Property and equipment acquired through landlord incentives
0 
6,000 
0 
Non-cash financing activities:
 
 
 
Establishment of liabilities under tax receivable agreement
173,090 
0 
0 
IPO And Organizational Transaction |
Class A Common Stock
 
 
 
Non-cash investing activities:
 
 
 
Class A common stock issued
6 
0 
0 
IPO And Organizational Transaction |
Class B Common Stock
 
 
 
Non-cash financing activities:
 
 
 
Cancellation of Class B common stock
(6)
0 
0 
Secondary Offering and Redemption of Units |
Class A Common Stock
 
 
 
Non-cash investing activities:
 
 
 
Class A common stock issued
6 
0 
0 
Secondary Offering and Redemption of Units |
Class B Common Stock
 
 
 
Non-cash financing activities:
 
 
 
Cancellation of Class B common stock
(6)
0 
0 
USC Merger |
Class A Common Stock
 
 
 
Non-cash investing activities:
 
 
 
Class A common stock issued
2 
0 
0 
USC Merger |
Class B Common Stock
 
 
 
Non-cash financing activities:
 
 
 
Cancellation of Class B common stock
$ (2)
$ 0 
$ 0 
COMMITMENTS AND CONTINGENCIES (Details) (USD $)
12 Months Ended 1 Months Ended 12 Months Ended
Dec. 30, 2015
Dec. 30, 2015
Letter of credit
Dec. 30, 2015
Retail site
Dec. 31, 2013
Office building
Nov. 30, 2015
Former Shake Shack Manager Litigation
manager
Dec. 30, 2015
Former Shake Shack Manager Litigation
Dec. 30, 2015
IPO
Loss Contingencies [Line Items]
 
 
 
 
 
 
 
Letters of credit outstanding
 
 
$ 160,000 
$ 80,000 
 
 
 
Renewal term
 
1 year 
 
 
 
 
 
Number of former Shake Shack managers
 
 
 
 
2 
 
 
Settlement agreement amount funded
 
 
 
 
 
750,000 
 
Liability recognized from settlement
 
 
 
 
 
770,000 
 
Percentage of tax benefits due to equity owners
85.00% 
 
 
 
 
 
85.00% 
Tax receivable agreement liability
$ 173,090,000 
 
 
 
 
 
 
RELATED PARTY TRANSACTIONS (Details) (USD $)
12 Months Ended
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Related Party Transaction [Line Items]
 
 
 
Percentage of tax benefits due to equity owners
85.00% 
 
 
Tax receivable agreement amount paid
$ 0 
$ 0 
 
Tax receivable agreement liability
173,090,000 
 
 
Affiliated Entity
 
 
 
Related Party Transaction [Line Items]
 
 
 
Management fee percentage
 
2.50% 
 
General and administrative expenses
157,000 
490,000 
473,000 
Amounts due to related parties
2,000 
238,000 
 
Due from related parties, current
0 
0 
 
Charitable campaign flow through
504,276 
338,346 
285,862 
Affiliated Entity |
Management fee
 
 
 
Related Party Transaction [Line Items]
 
 
 
Expenses from transactions with related party
0 
2,927,000 
2,455,000 
Affiliated Entity |
Rent Expense
 
 
 
Related Party Transaction [Line Items]
 
 
 
Expenses from transactions with related party
0 
38,000 
236,000 
Affiliated Entity |
Self insurance health care expense
 
 
 
Related Party Transaction [Line Items]
 
 
 
Expenses from transactions with related party
146,000 
1,306,000 
865,000 
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]
 
 
 
Expenses from transactions with related party
282,000 
218,000 
215,000 
Revenue from related parties
0 
0 
 
Madison Square Park Conservancy |
Rent Expense
 
 
 
Related Party Transaction [Line Items]
 
 
 
Expenses from transactions with related party
692,000 
528,000 
607,000 
Due to MSP Conservancy, Current
17,000 
0 
 
Madison Square Park Conservancy |
Share Our Strength
 
 
 
Related Party Transaction [Line Items]
 
 
 
Expenses from transactions with related party
$ 109,000 
$ 69,000 
$ 53,000 
GEOGRAPHIC INFORMATION (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 30, 2015
Sep. 30, 2015
Jul. 1, 2015
Apr. 1, 2015
Dec. 31, 2014
Sep. 24, 2014
Jun. 25, 2014
Mar. 26, 2014
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total revenue
$ 51,061 
$ 53,273 
$ 48,450 
$ 37,808 
$ 34,772 
$ 31,825 
$ 27,737 
$ 24,196 
$ 190,592 
$ 118,530 
$ 82,456 
United States
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
 
 
 
 
 
 
 
184,408 
112,743 
78,937 
Other countries
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
 
 
 
 
 
 
 
$ 6,184 
$ 5,787 
$ 3,519 
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
1 Months Ended 3 Months Ended 11 Months Ended 12 Months Ended
Feb. 3, 2015
Dec. 30, 2015
Sep. 30, 2015
Jul. 1, 2015
Apr. 1, 2015
Dec. 31, 2014
Sep. 24, 2014
Jun. 25, 2014
Mar. 26, 2014
Dec. 30, 2015
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Quarterly Financial Information Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
$ 51,061 
$ 53,273 
$ 48,450 
$ 37,808 
$ 34,772 
$ 31,825 
$ 27,737 
$ 24,196 
 
$ 190,592 
$ 118,530 
$ 82,456 
Operating income (loss)
 
3,654 
7,804 
6,244 
(10,949)
(987)
759 
2,142 
1,229 
 
6,753 
3,143 
5,935 
Net income
(13,049)
3,046 
6,193 
5,145 
(11,260)
(1,427)
504 
1,949 
1,092 
16,173 
3,124 
2,118 
5,423 
Net income attributable to Shake Shack Inc.
 
$ 1,246 
$ 1,528 
$ 1,118 
$ (12,668)
$ (1,427)
$ 504 
$ 1,949 
$ 1,092 
 
$ (8,776)
$ 2,118 
$ 5,423 
Earnings (loss) per share
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic (in dollars per share)
 
$ 0.08 
$ 0.11 
$ 0.09 
$ (1.06)
$ (0.05)
$ 0.02 
$ 0.07 
$ 0.04 
 
$ 0.11 1
 
 
Diluted (in dollars per share)
 
$ 0.07 
$ 0.10 
$ 0.08 
$ (1.06)
$ (0.05)
$ 0.02 
$ 0.07 
$ 0.04 
 
$ 0.10 1
 
 
Fiscal period duration
 
 
 
 
 
 
 
 
 
 
364 days 
371 days 
364 days 
SCHEDULE I: CONDENSED FINANCIAL INFORMATION OF REGISTRANT - NOTES TO FINANCIAL STATEMENTS (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
0 Months Ended 11 Months Ended 0 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 12 Months Ended
Dec. 30, 2015
Dec. 30, 2015
IPO
Feb. 4, 2015
Class A Common Stock
Common stock
Dec. 30, 2015
Class A Common Stock
Common stock
Feb. 4, 2015
Class A Common Stock
Common stock
IPO
Feb. 4, 2015
Class A Common Stock
Common stock
IPO
Feb. 4, 2015
Class A Common Stock
Common stock
Over-allotment option
Dec. 30, 2015
Parent Company
Dec. 31, 2014
Parent Company
Feb. 4, 2015
Parent Company
Class A Common Stock
Common stock
IPO
Feb. 4, 2015
Parent Company
Class A Common Stock
Common stock
IPO
Feb. 4, 2015
Parent Company
Class A Common Stock
Common stock
Over-allotment option
Dec. 30, 2015
Consolidation, Eliminations
Parent Company
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares issued during the period
 
 
5,968,841 
5,750,000 
5,750,000 
 
750,000 
 
 
5,750,000 
 
750,000 
 
Shares issued, share price (in dollars per share)
 
 
 
 
 
$ 21 
 
 
 
 
$ 21.000 
 
 
Proceeds of issuance of initial public offering net of underwriting discounts and commissions
 
 
 
 
$ 112,298 
 
 
 
 
$ 112,298 
 
 
 
Due form SSE Holdings
 
 
 
 
 
 
 
3,979 
0 
 
 
 
3,979 
Intercompany revenue
 
 
 
 
 
 
 
1,336 
0 
 
 
 
1,336 
Equity in net income of subsidiaries
 
 
 
 
 
 
 
6,906 
0 
 
 
 
6,906 
Tax receivable agreement liability
$ 173,090 
 
 
 
 
 
 
$ 173,090 
 
 
 
 
$ 173,090 
Percentage of tax benefits due to equity owners
85.00% 
85.00% 
 
 
 
 
 
85.00% 
 
 
 
 
 
SCHEDULE I: CONDENSED FINANCIAL INFORMATION OF REGISTRANT - BALANCE SHEET ADDITIONAL INFORMATION (Details) (USD $)
Dec. 30, 2015
Feb. 4, 2015
Dec. 31, 2014
Condensed Balance Sheet Statements, Captions [Line Items]
 
 
 
Preferred stock, par value (in dollars per share)
$ 0 
 
 
Preferred stock, shares authorized
10,000,000 
10,000,000 
 
Preferred stock, shares issued
0 
 
 
Preferred stock, shares outstanding
0 
 
 
Common stock par value (in dollars per share)
 
 
$ 0.01 
Common stock, shares authorized
 
 
100 
Common stock, shares, issued
 
 
0 
Common stock, shares, outstanding
 
 
0 
Parent Company
 
 
 
Condensed Balance Sheet Statements, Captions [Line Items]
 
 
 
Preferred stock, par value (in dollars per share)
$ 0 
 
 
Preferred stock, shares authorized
10,000,000 
 
 
Preferred stock, shares issued
0 
 
 
Preferred stock, shares outstanding
0 
 
 
Common stock par value (in dollars per share)
 
 
$ 0.01 
Common stock, shares authorized
 
 
100 
Common stock, shares, issued
 
 
0 
Common stock, shares, outstanding
 
 
0 
Class A Common Stock
 
 
 
Condensed Balance Sheet Statements, Captions [Line Items]
 
 
 
Common stock par value (in dollars per share)
$ 0.001 
$ 0.001 
 
Common stock, shares authorized
200,000,000 
200,000,000 
 
Common stock, shares, issued
19,789,259 
 
 
Common stock, shares, outstanding
19,789,259 
 
 
Class A Common Stock |
Parent Company
 
 
 
Condensed Balance Sheet Statements, Captions [Line Items]
 
 
 
Common stock par value (in dollars per share)
$ 0.001 
 
 
Common stock, shares authorized
200,000,000 
 
 
Common stock, shares, issued
19,789,259 
 
 
Common stock, shares, outstanding
19,789,259 
 
 
Class B Common Stock
 
 
 
Condensed Balance Sheet Statements, Captions [Line Items]
 
 
 
Common stock par value (in dollars per share)
$ 0.001 
$ 0.001 
 
Common stock, shares authorized
35,000,000 
35,000,000 
 
Common stock, shares, issued
16,460,741 
 
 
Common stock, shares, outstanding
16,460,741 
 
 
Class B Common Stock |
Parent Company
 
 
 
Condensed Balance Sheet Statements, Captions [Line Items]
 
 
 
Common stock par value (in dollars per share)
$ 0.001 
 
 
Common stock, shares authorized
35,000,000 
 
 
Common stock, shares, issued
16,460,741 
 
 
Common stock, shares, outstanding
16,460,741 
 
 
SCHEDULE I: CONDENSED FINANCIAL INFORMATION OF REGISTRANT - STATEMENTS OF COMPREHENSIVE INCOME (Details) (USD $)
In Thousands, unless otherwise specified
1 Months Ended 3 Months Ended 11 Months Ended 12 Months Ended
Feb. 3, 2015
Dec. 30, 2015
Sep. 30, 2015
Jul. 1, 2015
Apr. 1, 2015
Dec. 31, 2014
Sep. 24, 2014
Jun. 25, 2014
Mar. 26, 2014
Dec. 30, 2015
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Condensed Statement of Income Captions [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
$ (13,049)
$ 3,046 
$ 6,193 
$ 5,145 
$ (11,260)
$ (1,427)
$ 504 
$ 1,949 
$ 1,092 
$ 16,173 
$ 3,124 
$ 2,118 
$ 5,423 
Other comprehensive loss:
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized holding losses on available-for-sale securities
 
 
 
 
 
 
 
 
 
 
(11)
0 
0 
Income tax benefit
 
 
 
 
 
 
 
 
 
 
0 
0 
0 
OTHER COMPREHENSIVE LOSS, NET OF TAX
 
 
 
 
 
 
 
 
 
(11)
(11)
0 
0 
COMPREHENSIVE INCOME
 
 
 
 
 
 
 
 
 
 
3,113 
2,118 
5,423 
Parent Company
 
 
 
 
 
 
 
 
 
 
 
 
 
Condensed Statement of Income Captions [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 
 
 
 
 
 
 
 
 
 
4,273 
0 
 
Other comprehensive loss:
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized holding losses on available-for-sale securities
 
 
 
 
 
 
 
 
 
 
(5)
0 
 
Income tax benefit
 
 
 
 
 
 
 
 
 
 
0 
0 
 
OTHER COMPREHENSIVE LOSS, NET OF TAX
 
 
 
 
 
 
 
 
 
 
(5)
0 
 
COMPREHENSIVE INCOME
 
 
 
 
 
 
 
 
 
 
$ 4,268 
$ 0 
 
SCHEDULE I: CONDENSED FINANCIAL INFORMATION OF REGISTRANT - BALANCE SHEET (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Dec. 26, 2012
Current assets:
 
 
 
 
Total current assets
$ 78,934 
$ 7,925 
 
 
Deferred income taxes, net
201,957 
161 
 
 
TOTAL ASSETS
379,547 
82,962 
 
 
Current liabilities
 
 
 
 
Accrued expenses
6,801 
5,578 
 
 
Current portion of liabilities under tax receivable agreement
2,157 
0 
 
 
Total current liabilities
24,005 
48,177 
 
 
Total liabilities
222,528 
70,362 
 
 
Liabilities under tax receivable agreement, net of current portion
170,933 
0 
 
 
Commitments and contingencies
   
   
 
 
Stockholders' equity:
 
 
 
 
Preferred stock, no par value—10,000,000 shares authorized; none issued and outstanding as of December 30, 2015
0 
 
 
 
Common stock
 
0 
 
 
Additional paid-in capital
96,311 
 
 
 
Retained earnings
4,273 
 
 
 
Accumulated other comprehensive loss
(5)
 
 
 
Total stockholders' equity
157,019 
12,600 
37,387 
31,871 
TOTAL LIABILITIES AND STOCKHOLDERS' / MEMBERS' EQUITY
379,547 
82,962 
 
 
Class A Common Stock
 
 
 
 
Stockholders' equity:
 
 
 
 
Common stock
20 
 
 
 
Class B Common Stock
 
 
 
 
Stockholders' equity:
 
 
 
 
Common stock
16 
 
 
 
Parent Company
 
 
 
 
Current assets:
 
 
 
 
Cash
422 
0 
 
 
Prepaid expenses
628 
0 
 
 
Total current assets
1,050 
0 
 
 
Due form SSE Holdings
3,979 
0 
 
 
Deferred income taxes, net
201,614 
0 
 
 
Investment in subsidiaries
67,810 
 
 
 
TOTAL ASSETS
274,453 
0 
 
 
Current liabilities
 
 
 
 
Income taxes payable
689 
0 
 
 
Accrued expenses
59 
0 
 
 
Current portion of liabilities under tax receivable agreement
2,157 
0 
 
 
Total current liabilities
2,905 
0 
 
 
Total liabilities
173,838 
0 
 
 
Liabilities under tax receivable agreement, net of current portion
170,933 
0 
 
 
Commitments and contingencies
   
   
 
 
Stockholders' equity:
 
 
 
 
Preferred stock, no par value—10,000,000 shares authorized; none issued and outstanding as of December 30, 2015
0 
 
 
 
Common stock
 
0 
 
 
Additional paid-in capital
96,311 
 
 
 
Retained earnings
4,273 
 
 
 
Accumulated other comprehensive loss
(5)
 
 
 
Total stockholders' equity
100,615 
0 
 
 
TOTAL LIABILITIES AND STOCKHOLDERS' / MEMBERS' EQUITY
274,453 
0 
 
 
Parent Company |
Class A Common Stock
 
 
 
 
Stockholders' equity:
 
 
 
 
Common stock
20 
 
 
 
Parent Company |
Class B Common Stock
 
 
 
 
Stockholders' equity:
 
 
 
 
Common stock
$ 16 
 
 
 
SCHEDULE I: CONDENSED FINANCIAL INFORMATION OF REGISTRANT - STATEMENT OF INCOME (Details) (USD $)
In Thousands, unless otherwise specified
1 Months Ended 3 Months Ended 11 Months Ended 12 Months Ended
Feb. 3, 2015
Dec. 30, 2015
Sep. 30, 2015
Jul. 1, 2015
Apr. 1, 2015
Dec. 31, 2014
Sep. 24, 2014
Jun. 25, 2014
Mar. 26, 2014
Dec. 30, 2015
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Condensed Income Statements, Captions [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
TOTAL REVENUE
 
$ 51,061 
$ 53,273 
$ 48,450 
$ 37,808 
$ 34,772 
$ 31,825 
$ 27,737 
$ 24,196 
 
$ 190,592 
$ 118,530 
$ 82,456 
General and administrative expenses
 
 
 
 
 
 
 
 
 
 
37,825 
18,187 
12,453 
TOTAL EXPENSES
 
 
 
 
 
 
 
 
 
 
183,839 
115,387 
76,521 
OPERATING INCOME
 
3,654 
7,804 
6,244 
(10,949)
(987)
759 
2,142 
1,229 
 
6,753 
3,143 
5,935 
INCOME BEFORE INCOME TAXES
 
 
 
 
 
 
 
 
 
 
6,428 
2,780 
5,883 
Income tax expense
 
 
 
 
 
 
 
 
 
 
3,304 
662 
460 
NET INCOME
(13,049)
3,046 
6,193 
5,145 
(11,260)
(1,427)
504 
1,949 
1,092 
16,173 
3,124 
2,118 
5,423 
Parent Company
 
 
 
 
 
 
 
 
 
 
 
 
 
Condensed Income Statements, Captions [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Intercompany revenue
 
 
 
 
 
 
 
 
 
 
1,336 
0 
 
TOTAL REVENUE
 
 
 
 
 
 
 
 
 
 
1,336 
0 
 
General and administrative expenses
 
 
 
 
 
 
 
 
 
 
1,336 
0 
 
TOTAL EXPENSES
 
 
 
 
 
 
 
 
 
 
1,336 
0 
 
OPERATING INCOME
 
 
 
 
 
 
 
 
 
 
0 
0 
 
Equity in net income of subsidiaries
 
 
 
 
 
 
 
 
 
 
6,906 
0 
 
INCOME BEFORE INCOME TAXES
 
 
 
 
 
 
 
 
 
 
6,906 
0 
 
Income tax expense
 
 
 
 
 
 
 
 
 
 
2,633 
0 
 
NET INCOME
 
 
 
 
 
 
 
 
 
 
$ 4,273 
$ 0 
 
SCHEDULE I: CONDENSED FINANCIAL INFORMATION OF REGISTRANT - STATEMENTS OF CASH FLOWS (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
OPERATING ACTIVITIES
 
 
 
Net income
$ 3,124 
$ 2,118 
$ 5,423 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Equity-based compensation
16,681 
165 
93 
Deferred income taxes
(734)
(93)
7 
Changes in operating assets and liabilities:
 
 
 
Accrued expenses
2,548 
3,349 
(713)
INVESTING ACTIVITIES
 
 
 
NET CASH USED IN INVESTING ACTIVITIES
(34,514)
(28,515)
(16,194)
FINANCING ACTIVITIES
 
 
 
Proceeds from issuance of Class A common stock sold in initial public offering, net of underwriting discounts and commissions
109,262 
0 
0 
Proceeds from issuance of Class B common stock
30 
0 
0 
NET CASH PROVIDED BY FINANCING ACTIVITIES
61,428 
4,532 
313 
NET CASH PROVIDED BY OPERATING ACTIVITIES
41,258 
13,584 
12,924 
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
68,172 
(10,399)
(2,957)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
2,677 
13,076 
16,033 
CASH AND CASH EQUIVALENTS AT END OF PERIOD
70,849 
2,677 
13,076 
Non-cash financing activities:
 
 
 
Establishment of liabilities under tax receivable agreement
173,090 
0 
0 
Class A Common Stock |
IPO And Organizational Transaction
 
 
 
Non-cash investing activities:
 
 
 
Class A common stock issued
6 
0 
0 
Class A Common Stock |
USC Merger
 
 
 
Non-cash investing activities:
 
 
 
Class A common stock issued
2 
0 
0 
Class A Common Stock |
Secondary Offering and Redemption of Units
 
 
 
Non-cash investing activities:
 
 
 
Class A common stock issued
6 
0 
0 
Class B Common Stock |
IPO And Organizational Transaction
 
 
 
Non-cash financing activities:
 
 
 
Cancellation of Class B common stock
(6)
0 
0 
Class B Common Stock |
USC Merger
 
 
 
Non-cash financing activities:
 
 
 
Cancellation of Class B common stock
(2)
0 
0 
Class B Common Stock |
Secondary Offering and Redemption of Units
 
 
 
Non-cash financing activities:
 
 
 
Cancellation of Class B common stock
(6)
0 
0 
Parent Company
 
 
 
OPERATING ACTIVITIES
 
 
 
Net income
4,273 
0 
 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Equity income from affiliates
(6,906)
0 
 
Equity-based compensation
330 
0 
 
Deferred income taxes
(551)
0 
 
Changes in operating assets and liabilities:
 
 
 
Due from SSE Holdings
4 
0 
 
Accrued expenses
58 
0 
 
Income taxes payable
3,184 
0 
 
INVESTING ACTIVITIES
 
 
 
Purchases of LLC Interests from SSE Holdings
(112,298)
0 
 
NET CASH USED IN INVESTING ACTIVITIES
(112,298)
0 
 
FINANCING ACTIVITIES
 
 
 
Proceeds from issuance of Class A common stock sold in initial public offering, net of underwriting discounts and commissions
112,298 
0 
 
Proceeds from issuance of Class B common stock
30 
0 
 
NET CASH PROVIDED BY FINANCING ACTIVITIES
112,328 
0 
 
NET CASH PROVIDED BY OPERATING ACTIVITIES
392 
0 
 
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
422 
0 
 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
0 
0 
 
CASH AND CASH EQUIVALENTS AT END OF PERIOD
422 
0 
 
Non-cash financing activities:
 
 
 
Establishment of liabilities under tax receivable agreement
173,090 
0 
 
Parent Company |
Class A Common Stock |
IPO And Organizational Transaction
 
 
 
Non-cash investing activities:
 
 
 
Class A common stock issued
6 
0 
 
Parent Company |
Class A Common Stock |
USC Merger
 
 
 
Non-cash investing activities:
 
 
 
Class A common stock issued
2 
0 
 
Parent Company |
Class A Common Stock |
Secondary Offering and Redemption of Units
 
 
 
Non-cash investing activities:
 
 
 
Class A common stock issued
19,933 
0 
 
Parent Company |
Class B Common Stock |
IPO And Organizational Transaction
 
 
 
Non-cash financing activities:
 
 
 
Cancellation of Class B common stock
(6)
0 
 
Parent Company |
Class B Common Stock |
USC Merger
 
 
 
Non-cash financing activities:
 
 
 
Cancellation of Class B common stock
(2)
0 
 
Parent Company |
Class B Common Stock |
Secondary Offering and Redemption of Units
 
 
 
Non-cash financing activities:
 
 
 
Cancellation of Class B common stock
$ (6)
$ 0 
 
SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS (Details) (Deferred tax asset valuation allowance:, USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 30, 2015
Dec. 31, 2014
Dec. 25, 2013
Deferred tax asset valuation allowance:
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Balance at beginning of period
$ 0 
$ 0 
$ 0 
Charged to costs and expenses
0 
0 
0 
Charged to other accounts
39,700 
0 
0 
Reductions
(16,545)
0 
0 
Balance at end of period
$ 23,155 
$ 0 
$ 0