SHAKE SHACK INC., 10-Q filed on 11/6/2015
Quarterly Report
Document and Entity Information Document
9 Months Ended
Sep. 30, 2015
Oct. 30, 2015
Class A Common Stock
Oct. 30, 2015
Class B Common Stock
Document Information [Line Items]
 
 
 
Document type
10-Q 
 
 
Amendment flag
false 
 
 
Document period end date
Sep. 30, 2015 
 
 
Document fiscal year focus
2015 
 
 
Document fiscal period focus
Q3 
 
 
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
 
15,213,420 
21,036,580 
Condensed Consolidated Balance Sheets (USD $)
Sep. 30, 2015
Dec. 31, 2014
Current assets
 
 
Cash
$ 69,821,000 
$ 2,677,000 
Accounts receivable
3,135,000 
3,278,000 
Inventories
607,000 
529,000 
Prepaid expenses and other current assets
2,243,000 
1,441,000 
Deferred income taxes
20,000 
20,000 
Total current assets
75,826,000 
7,945,000 
Property and equipment, net
87,977,000 
70,124,000 
Deferred income taxes, net
107,565,000 
141,000 
Other assets
3,414,000 
4,752,000 
TOTAL ASSETS
274,782,000 
82,962,000 
Current liabilities
 
 
Short-term borrowings
0 
32,000,000 
Accounts payable
5,336,000 
6,440,000 
Accrued expenses
6,471,000 
5,578,000 
Accrued wages and related liabilities
4,752,000 
2,410,000 
Other current liabilities
3,401,000 
1,749,000 
Total current liabilities
19,960,000 
48,177,000 
Notes payable
313,000 
313,000 
Deferred rent
21,317,000 
17,853,000 
Liability under tax receivable agreement
91,311,000 
0 
Other long-term liabilities
3,754,000 
4,019,000 
Total liabilities
136,655,000 
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 September 30, 2015
0 
 
Common stock
 
0 
Additional paid-in capital
129,584,000 
 
Retained earnings
1,749,000 
 
Total stockholders' equity attributable to Shake Shack Inc. / members' equity
131,369,000 
12,600,000 
Non-controlling interests
6,758,000 
 
Total equity
138,127,000 
12,600,000 
TOTAL LIABILITIES AND STOCKHOLDERS' / MEMBERS' EQUITY
274,782,000 
82,962,000 
Class A Common Stock
 
 
Stockholders' / members' equity
 
 
Common stock
15,000 
 
Class B Common Stock
 
 
Stockholders' / members' equity
 
 
Common stock
$ 21,000 
 
Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Sep. 30, 2015
Dec. 31, 2014
Preferred Stock, No Par Value
$ 0 
 
Preferred stock, shares authorized
10,000,000 
 
Preferred stock, shares issued
0 
 
Preferred stock, shares outstanding
0 
 
Common stock par value (in usd 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 usd per share)
$ 0.001 
 
Common stock, shares authorized
200,000,000 
 
Common stock, shares, issued
15,213,420 
 
Common stock, shares, outstanding
15,213,420 
 
Class B Common Stock
 
 
Common stock par value (in usd per share)
$ 0.001 
 
Common stock, shares authorized
35,000,000 
 
Common stock, shares, issued
21,036,580 
 
Common stock, shares, outstanding
21,036,580 
 
Condensed Consolidated Statement of Income (Loss) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 24, 2014
Sep. 30, 2015
Sep. 24, 2014
Shack sales
$ 51,275 
$ 30,165 
$ 133,905 
$ 78,988 
Licensing revenue
1,998 
1,660 
5,626 
4,770 
TOTAL REVENUE
53,273 
31,825 
139,531 
83,758 
Shack-level operating expenses:
 
 
 
 
Food and paper costs
14,929 
9,340 
39,650 
24,248 
Labor and related expenses
12,176 
7,668 
32,445 
20,605 
Other operating expenses
4,376 
2,905 
11,579 
7,866 
Occupancy and related expenses
4,206 
2,675 
11,248 
6,794 
General and administrative expenses
5,728 
5,200 
30,165 
12,192 
Depreciation expense
2,636 
1,502 
7,274 
4,067 
Pre-opening costs
1,401 
1,766 
4,054 
3,828 
Loss on disposal of property and equipment
17 
10 
17 
28 
TOTAL EXPENSES
45,469 
31,066 
136,432 
79,628 
OPERATING INCOME
7,804 
759 
3,099 
4,130 
Interest expense, net
83 
128 
245 
219 
INCOME BEFORE INCOME TAXES
7,721 
631 
2,854 
3,911 
Income tax expense
1,528 
127 
2,776 
366 
NET INCOME
6,193 
504 
78 
3,545 
Less: net loss attributable to non-controlling interests
4,665 
0 
10,100 
0 
Net income (loss) attributable to Shake Shack Inc.
1,528 
504 
(10,022)
3,545 
Earnings per share of Class A common stock
 
 
 
 
Basic (in USD per share)
$ 0.11 1
$ 0.02 1
$ (0.80)1
$ 0.12 1
Diluted (in USD per share)
$ 0.10 1
$ 0.02 1
$ (0.80)1
$ 0.12 1
Weighted-average shares of Class A common stock outstanding
 
 
 
 
Basic (shares)
13,757 1
29,978 1
12,590 1
29,968 1
Diluted (shares)
14,785 1
30,104 1
12,590 1
30,119 1
Pro forma earnings per share of Class A common stock
 
 
 
 
Basic (in USD per share)
 
 
$ (0.02)2
 
Diluted (in USD per share)
 
 
$ (0.02)2
 
Pro forma
 
 
 
 
Shack-level operating expenses:
 
 
 
 
Income tax expense
 
 
1,757 2
 
Net income (loss) attributable to Shake Shack Inc.
 
 
$ (295)2
 
Condensed Consolidated Statements 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 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 ($)
Non- Controlling Interest
USD ($)
Beginning balance at Dec. 31, 2014
$ 12,600 
 
 
$ 12,600 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
Less: net loss prior to the Organizational Transactions
(13,049)
 
 
(13,049)
 
 
 
 
 
Member distributions
(11,125)
 
 
(11,125)
 
 
 
 
 
Equity-based compensation recognized prior to the Organizational Transactions
7,731 
 
 
7,731 
 
 
 
 
 
Ending balance at Feb. 03, 2015
 
 
 
 
 
 
 
 
 
Beginning balance at Dec. 31, 2014
12,600 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
Less: net loss prior to the Organizational Transactions
78 
 
 
 
 
 
 
 
 
Issuance of class A common stock in settlement of unit appreciation rights (shares)
 
 
 
 
339,306 
 
 
 
 
Ending balance at Sep. 30, 2015
138,127 
 
 
 
15 
 
 
 
 
Common stock, balance (shares) at Sep. 30, 2015
 
15,213,420 
21,036,580 
 
15,213,420 
 
 
 
 
Beginning balance at Feb. 03, 2015
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
Less: net loss prior to the Organizational Transactions
13,127 
 
 
 
 
 
 
3,027 
10,100 
Issuance of Class A common stock sold in initial public offering, net of offering costs (shares)
 
 
 
 
5,750,000 
 
 
 
 
Issuance of Class A common stock sold in initial public offering, net of offering costs
109,362 
 
 
 
6 
 
109,356 
 
 
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 
 
 
 
0 
 
 
 
 
Effect of organizational transactions (shares)
 
 
 
 
5,968,841 
24,191,853 
 
 
 
Effect of the Organizational Transactions
30 
 
 
3,843 
6 
24 
 
(1,278)
(2,565)
Equity-based compensation recognized subsequent to the Organizational Transactions
3,142 
 
 
 
 
 
3,142 
 
 
Deferred tax adjustment related to tax receivable agreement
16,309 
 
 
 
 
 
16,309 
 
 
Redemption of LLC interests in connection with secondary offering (shares)
 
 
 
 
3,155,273 
(3,155,273)
 
 
 
Redemption of LLC Interests in connection with the secondary offering
0 
 
 
 
3 
(3)
777 
   
(777)
Ending balance at Sep. 30, 2015
$ 138,127 
 
 
 
$ 15 
$ 21 
$ 129,584 
$ 1,749 
$ 6,758 
Common stock, balance (shares) at Sep. 30, 2015
 
15,213,420 
21,036,580 
 
15,213,420 
21,036,580 
 
 
 
Condensed Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Sep. 24, 2014
OPERATING ACTIVITIES
 
 
Net income
$ 78 
$ 3,545 
Adjustments to reconcile net income to net cash provided by operating activities
 
 
Depreciation expense
7,274 
4,067 
Equity-based compensation
15,509 
124 
Non-cash interest expense
203 
75 
Loss on disposal of property and equipment
17 
28 
Changes in operating assets and liabilities:
 
 
Accounts receivable
143 
(786)
Inventories
(78)
(26)
Prepaid expenses and other current assets
(802)
(38)
Other assets
1,431 
(1,120)
Accounts payable
(240)
(204)
Accrued expenses
1,260 
2,067 
Accrued wages and related liabilities
2,342 
(47)
Other current liabilities
421 
(70)
Deferred rent
3,717 
3,835 
Other long-term liabilities
(332)
(17)
NET CASH PROVIDED BY OPERATING ACTIVITIES
30,943 
11,433 
INVESTING ACTIVITIES
 
 
Purchases of property and equipment
(25,327)
(17,885)
NET CASH USED IN INVESTING ACTIVITIES
(25,327)
(17,885)
FINANCING ACTIVITIES
 
 
Proceeds from revolving credit facility
4,000 
5,000 
Payments on revolving credit facility
(36,000)
0 
Deferred financing costs
(103)
(298)
Proceeds from issuance of Class A common stock sold in initial public offering, net of underwriting discounts and offering costs
109,362 
0 
Proceeds from issuance of Class B common stock
30 
0 
Member distributions
(11,125)
(5,219)
Employee withholding taxes related to net settled equity awards
(4,636)
0 
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
61,528 
(517)
INCREASE (DECREASE) IN CASH
67,144 
(6,969)
CASH AT BEGINNING OF PERIOD
2,677 
13,076 
CASH AT END OF PERIOD
$ 69,821 
$ 6,107 
Organization and Nature of Operations
Organization and Nature of Operations
ORGANIZATION AND 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 September 30, 2015, there were 75 Shacks in operation, system-wide, of which 41 were domestic company-operated Shacks, five were domestic licensed Shacks and 29 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 8.
▪
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 8.
▪
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 have a minority economic interest in SSE Holdings, we have 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 condensed 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 newly-issued LLC Interests, increasing our total ownership interest in SSE Holdings. Following the completion of the secondary offering, we own 42.0% of SSE Holdings and the Continuing SSE Equity Owners own the remaining 58.0% of SSE Holdings.
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements include the accounts of Shake Shack Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and on a basis consistent in all material respects with the accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 ("2014 Form 10-K"). In our opinion, all adjustments, which are normal and recurring in nature, necessary for a fair presentation of our financial position and results of operation have been included. Certain reclassifications have been made to prior period amounts to conform to the current year presentation. Operating results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year.
The accompanying Condensed Consolidated Balance Sheet as of December 31, 2014 has been derived from the audited financial statements at that date but does not include all of the disclosures required by GAAP. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in our 2014 Form 10-K.
We do not have any components of other comprehensive income recorded within our condensed consolidated financial statements, and, therefore, do not separately present a statement of comprehensive income in our condensed consolidated financial statements.
Fiscal Year
We operate on a 52/53 week fiscal year ending on the last Wednesday in December. Fiscal 2015 contains 52 weeks and ends on December 30, 2015. Fiscal 2014 contained 53 weeks and ended on December 31, 2014. Unless otherwise stated, references to years in this report relate to fiscal years.
Use of Estimates
The preparation of these condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of sales and expenses during the reporting period. Actual results could differ from those estimates.
Recently Issued Accounting Pronouncements       
In August 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements ("ASU 2015-15"), which clarifies the guidance set forth in Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"), issued in April 2015. ASU 2015-03 requires that debt issuance costs related to a recognized liability be presented on the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected. ASU 2015-15 provides additional guidance regarding debt issuance costs associated with line-of-credit arrangements, stating that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred issuance costs ratably over the term of the line-of-credit arrangement. ASU 2015-03 is effective for reporting periods beginning after December 15, 2015. The adoption of ASU 2015-03 and ASU 2015-15 is not expected to have a material effect our consolidated financial position, results of operations or cash flows.
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 position, results of operations or cash flows.
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. We are currently evaluating the impact ASU 2015-05 will have on our 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. We are currently evaluating the impact ASU 2015-02 will have on our consolidated financial statements.
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 supersedes the existing revenue recognition guidance and clarifies the principles for recognizing revenue. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. In 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 position, results of operations and cash flows.
Fair Value Measurements
Fair Value Measurements
FAIR VALUE MEASUREMENTS
The carrying value of our financial instruments, including cash, accounts receivable, accounts payable, and accrued expenses as of September 30, 2015 and December 31, 2014 approximated their fair value due to the short-term nature of these financial instruments. Assets and liabilities that are measured at fair value on a non-recurring basis include our long-lived assets. There were no impairments recognized during the thirteen and thirty-nine weeks ended September 30, 2015 and September 24, 2014.
Inventories
Inventories
INVENTORIES
Inventories as of September 30, 2015 and December 31, 2014 consisted of the following:
 
September 30,
2015
 
December 31,
2014
Food
$
396

 
$
354

Wine
30

 
28

Beer
42

 
33

Beverages
55

 
42

Retail merchandise
84

 
72

Inventories
$
607

 
$
529

Property and Equipment, Net
Property and Equipment, Net
PROPERTY AND EQUIPMENT, NET
Property and equipment consisted of the following:
 
September 30, 2015
 
December 31, 2014
Leasehold improvements
$
76,067

 
$
58,272

Equipment
15,667

 
12,108

Furniture and fixtures
4,427

 
3,249

Computer equipment and software
4,825

 
3,529

Construction in progress
7,562

 
6,309

 
108,548

 
83,467

Less: accumulated depreciation
(20,571
)
 
(13,343
)
Property and equipment, net
$
87,977

 
$
70,124

Supplemental Balance Sheet Information
Supplemental Balance Sheet Information
SUPPLEMENTAL BALANCE SHEET INFORMATION
The components of other current liabilities as of September 30, 2015 and December 31, 2014 are as follows:
 
September 30,
2015
 
December 31,
2014
Sales tax payable
$
1,117

 
$
736

Liability under tax receivable agreement
1,105

 
—

Gift card liability
599

 
625

Other
580

 
388

Other current liabilities
$
3,401

 
$
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"), which provides for a revolving total commitment amount of $50,000, of which $20,000 is available immediately. The Revolving Credit Facility will mature and all amounts outstanding will be due and payable five years from the effective date. The Revolving Credit Facility permits the issuance of letters of credit upon our request of up to $10,000. Borrowings under the Revolving Credit Facility bear interest at either: (i) LIBOR plus a percentage ranging from 2.5% to 3.5% or (ii) the prime rate plus a percentage ranging from 0.0% to 1.0%, depending on the type of borrowing made under the Revolving Credit Facility. As of December 31, 2014, amounts outstanding under the Revolving Credit Facility totaled $32,000, and were classified as short-term borrowings on the Condensed Consolidated Balance Sheets. During the thirty-nine weeks ended September 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 September 30, 2015, there were no amounts outstanding under the Revolving Credit Facility. We had $19,920 of availability as of September 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 September 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 September 30, 2015 and December 31, 2014, the outstanding balance of the promissory note was $313.
Stockholders' Equity
Stockholders' 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 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 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.
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 of existing Class A common stock and (ii) 3,155,273 newly-issued shares of Class A common stock issued in connection with the redemption 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 canceled. Following the completion of the secondary offering, 15,213,420 shares of Class A common stock and 21,036,580 shares of Class B common stock were outstanding.
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.
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 "Additional 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.
Non-Controlling Interests
Non-Controlling Interests
NON-CONTROLLING INTERESTS
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.
In August 2015, in connection with the secondary offering, 3,155,273 LLC Interests were redeemed by the Selling Stockholders for newly-issued shares of Class A common stock and we received 3,155,273 newly-issued LLC Interests, increasing our total ownership interest in SSE Holdings.
As of September 30, 2015, there were 36,250,000 LLC Interests outstanding, of which we owned 15,213,420 LLC Interests, representing a 42.0% ownership interest in SSE Holdings.
The following table summarizes the effects of changes in ownership in SSE Holdings on our equity:
 
 
September 30, 2015
 
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
Net income (loss) attributable to Shake Shack Inc.
$
1,528

 
$
(10,022
)
Transfers to non-controlling interests


 



Decrease in retained earnings as a result of the Organizational Transactions
—

 
(1,278
)
 
Increase in additional paid-in capital as a result of the redemption of LLC Interests
777

 
777

Change from net income (loss) attributable to Shake Shack Inc. and transfers to non-controlling interest
$
2,305

 
$
(10,523
)
Equity-Based Compensation
Equity-Based Compensation
EQUITY-BASED COMPENSATION
A summary of equity-based compensation expense recognized during the thirteen and thirty-nine weeks ended September 30, 2015 and September 24, 2014 is as follows:
 
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
 
September 30,
2015
 
September 24,
2014
 
September 30,
2015
 
September 24,
2014
Unit appreciation rights
$
—

 
$
—

 
$
11,762

 
$
—

Restricted Class B units
—

 
41

 
605

 
124

Stock options
1,172

 
—

 
3,142

 
—

Equity-based compensation expense
$
1,172

 
$
41

 
$
15,509

 
$
124


Amounts are included in general and administrative expense on the Condensed Consolidated Statements of Income (Loss). No income tax benefits were recognized related to equity-based compensation during the thirteen and thirty-nine weeks ended September 30, 2015 and September 24, 2014.
Unit Appreciation Rights
Prior to the IPO, we maintained a Unit Appreciation Rights Plan (the "UAR Plan"), effective in fiscal year 2012, and as amended, whereby we had the authority to grant up to 31,303 unit appreciation rights ("UARs") to employees. The UARs granted were subject to continued employment and were only exercisable upon a qualifying transaction, which was either a change of control or an initial public offering, 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 the thirty-nine weeks ended September 30, 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 the thirteen and thirty-nine weeks ended September 24, 2014 related to the outstanding UARs as 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 thirty-nine weeks ended September 30, 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 thirty-nine weeks ended September 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 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 the thirty-nine weeks ended September 30, 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 the thirty-nine weeks ended September 30, 2015 was $667. 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 equity-based awards to employees, directors and officers. 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:
 
Thirty-Nine Weeks Ended September 30, 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 thirty-nine weeks ended September 30, 2015 is as follows:
 
 
Stock
Options
 
Weighted
Average
Exercise
Price
Outstanding at beginning of period
—

 
$
—

 
Granted
2,622,281

 
21.00

 
Exercised
—

 
—

 
Forfeited
(41,425
)
 
(21.00
)
Outstanding at end of period
2,580,856

 
$
21.00


The weighted-average grant date fair value of stock options granted during the thirty-nine weeks ended September 30, 2015 was $8.53. As of September 30, 2015, there were 2,580,856 stock options outstanding, of which none were exercisable. As of September 30, 2015, total unrecognized compensation expense related to unvested stock options, including an estimate for pre-vesting forfeitures, was $19,109, which is expected to be recognized over a weighted-average period of 4.3 years.
Income Taxes
Income Taxes
INCOME TAXES
As a result of the IPO and Organizational Transactions, we became the sole managing member of SSE Holdings, which 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. We are also subject to withholding taxes in foreign jurisdictions.
A reconciliation of income tax expense computed at the U.S. federal statutory income tax rate to the income tax expense recognized is as follows:
 
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
 
September 30,
2015
 
September 24,
2014
 
September 30,
2015
 
September 24,
2014
Income before income taxes
$
7,721

 
$
631

 
$
2,854

 
$
3,911

Less: net loss prior to the Organizational Transactions
—

 
—

 
(13,049
)
 
—

Less: net income attributable to non-controlling interests
4,665

 
—

 
10,100

 
—

 
Income attributable to Shake Shack Inc. before income taxes
3,056

 
631

 
5,803

 
3,911

 
 
 
 
 
 
 
 
 
Income taxes at U.S. federal statutory rate
1,070

 
221

 
2,031

 
1,369

State and local income taxes, net of federal benefit
357

 
48

 
422

 
128

Foreign withholding taxes
70

 
78

 
214

 
237

Non-deductible expenses
31

 
—

 
109

 
—

LLC flow-through structure
—

 
(220
)
 
—

 
(1,368
)
Income tax expense
$
1,528

 
$
127

 
$
2,776

 
$
366


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 are 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 Condensed Consolidated Statements of Income (Loss) for the thirty-nine weeks ended September 30, 2015 has been computed to reflect a benefit from income taxes at an effective tax rate of 61.6%. 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.
Tax Receivable Agreement
We expect to obtain an increase in our share of the tax basis of our share of the net assets of SSE Holdings when LLC Interests are redeemed or exchanged by the Continuing SSE Equity Owners and other qualifying transactions. This increase in tax basis may have the effect of reducing the amounts that we would otherwise pay in the future to various tax authorities. The increase in tax basis 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 tax benefits, if any, that Shake Shack actually realizes or in some cases are 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 or any prior sales of interests in SSE Holdings and (ii) certain other tax benefits related to our making payments under the Tax Receivable Agreement.
During the thirty-nine weeks ended September 30, 2015, SSE Holdings paid a distribution in the amount of $11,125 to certain of the Original SSE Equity Owners. This distribution triggered an increase in the tax basis of the net assets of SSE Holdings subject to the provisions of the Tax Receivable Agreement. We recognized a deferred tax asset in the amount of $6,006 and a corresponding liability of $5,105, representing 85% of the tax benefits due to the Continuing SSE Equity Owners.
In August 2015, in connection with the secondary offering, 3,155,273 LLC Interests were redeemed by the Selling Stockholders for newly-issued shares of Class A common stock, resulting in an increase in the tax basis of the net assets of SSE Holdings subject to the provisions of the Tax Receivable Agreement. We recognized a deferred tax asset in the amount of $102,719 and a corresponding liability of $87,311. As of September 30, 2015, the total amount due to the Continuing SSE Equity Owners under the Tax Receivable Agreement was $92,416.
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 computation does 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 the thirteen and thirty-nine weeks ended September 30, 2015 and September 24, 2014.
 
 
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
 
 
September 30,
2015
 
September 24,
2014
 
September 30,
2015
 
September 24,
2014
Numerator:
 
 
 
 
 
 
 
 
Net income
$
6,193

 
$
504

 
$
78

 
$
3,545

 
Less: net income attributable to non-controlling interests
4,665

 
—

 
10,100

 
—

 
Net income (loss) attributable to Shake Shack Inc.
$
1,528

 
$
504

 
$
(10,022
)
 
$
3,545

Denominator:
 
 
 
 
 
 
 
 
Weighted-average shares of Class A common stock outstanding—basic
13,757

 
29,978

 
12,590

 
29,968

 
Effect of dilutive securities:
 
 
 
 
 
 
 
 
 
Restricted Class B units
—

 
126

 
—

 
151

 
 
Stock options
1,028

 
—

 
—

 
—

 
Weighted-average shares of Class A common stock outstanding—diluted
14,785

 
30,104

 
12,590

 
30,119

 
 
 
 
 
 
 
 
 
 
Earnings per share of Class A common stock—basic
$
0.11

 
$
0.02

 
$
(0.80
)
 
$
0.12

Earnings per share of Class A common stock—diluted
$
0.10

 
$
0.02

 
$
(0.80
)
 
$
0.12


2,580,856 stock options were excluded from the computation of diluted earnings per share of Class A common stock for the thirty-nine weeks ended September 30, 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 21,036,580 shares of Class B common stock outstanding as of September 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 the thirty-nine weeks ended September 30, 2015 and September 24, 2014:
 
 
Thirty-Nine Weeks Ended
 
 
September 30,
2015
 
September 24,
2014
Cash paid for:
 
 
 
 
Income taxes, net of refunds
$
338

 
$
531

 
Interest
183

 
59

Non-cash investing activities:
 
 
 
 
Accrued purchases of property and equipment
3,682

 
1,304

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

 
—

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
3

 
—

 
Cancellation of Class B common stock in connection with the redemption of LLC Interests
(3
)
 
—

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 2031. 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.
As security under the terms of several of our leases, we are obligated under letters of credit totaling $160 as of September 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
We are subject to various legal and regulatory proceedings, claims and liabilities, such as employment-related claims and slip and fall cases, which arise in the ordinary course of business and are generally covered by insurance. As of September 30, 2015, the amount of ultimate liability with respect to these matters was not material.
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 $686 and $1,975 for the thirteen and thirty-nine weeks ended September 24, 2014, 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 the thirteen and thirty-nine weeks ended September 30, 2015.
Previously, we sub-leased office space from USHG on a month-to-month basis. Amounts paid to USHG as rent totaled $38 for the thirty-nine weeks ended September 24, 2014. These amounts are included in general and administrative expense on the Condensed Consolidated Statements of Income (Loss). No amounts were paid during the thirteen weeks ended September 24, 2014.
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 $311 and $913 for the thirteen and thirty-nine weeks ended September 24, 2014, 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 the thirty-nine weeks ended September 30, 2015 was $188. No amounts were paid to USHG for health insurance costs for the thirteen weeks ended September 30, 2015. These amounts are included in labor and related expenses and general and administrative expenses on the Condensed Consolidated Statements of Income (Loss). Additionally, our employees are eligible participants under USHG's 401(k) plan. We pay our share of the employer's matching contributions directly to the third-party plan trustee.
Total amounts payable to the USHG as of September 30, 2015 and December 31, 2014 were $7 and $238, respectively, and are included in other current liabilities on the Condensed Consolidated Balance Sheets. Amounts due from USHG for expenses paid by us on behalf of USHG totaled $10 as of September 30, 2015, which is included in prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets. No amounts were due from USHG as of December 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 the thirteen and thirty-nine weeks ended September 30, 2015 were $157 and $252, respectively, and $122 and $206 for the thirteen and thirty-nine weeks ended September 24, 2014, respectively. Total amounts due from HYSE as of September 30, 2015 were $63. No amounts were due from HYSE as of December 31, 2014 due to the seasonal nature of the concession stands.
Madison Square Park Conservancy
The Chairman of our Board of Directors serves as a director of the Madison Square Park Conservancy ("MSP Conservancy"), with which we have a license agreement and pay license fees to operate our Madison Square Park Shack. Amounts paid to Madison Square Park Conservancy as rent amounted to $331 and $442 for the thirteen and thirty-nine weeks ended September 30, 2015, respectively, and $204 and $487 for the thirteen and thirty-nine weeks ended September 24, 2014, respectively. These amounts are included in occupancy and related expenses on the Condensed Consolidated Statements of Income (Loss). Total amounts due to the MSP Conservancy as of September 30, 2015 were $187. No amounts were due to the MSP Conservancy as of December 31, 2014 as our Madison Square Park Shack was closed for renovations.
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 tax benefits, if any, that Shake Shack actually realizes or in some cases are 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 or any prior sales of interests in SSE Holdings and (ii) certain other tax benefits related to our making payments under the Tax Receivable Agreement. See Note 11 for further information. There were no amounts paid to the Continuing SSE Equity Owners during the thirteen and thirty-nine weeks ended September 30, 2015. Total amounts due to the Continuing SSE Equity Owners as of September 30, 2015 under the tax receivable agreement were $92,416.
Summary of Significant Accounting Policies (Policies)
Basis of presentation 
The accompanying unaudited condensed consolidated financial statements include the accounts of Shake Shack Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and on a basis consistent in all material respects with the accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 ("2014 Form 10-K"). In our opinion, all adjustments, which are normal and recurring in nature, necessary for a fair presentation of our financial position and results of operation have been included. Certain reclassifications have been made to prior period amounts to conform to the current year presentation. Operating results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year.
The accompanying Condensed Consolidated Balance Sheet as of December 31, 2014 has been derived from the audited financial statements at that date but does not include all of the disclosures required by GAAP. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in our 2014 Form 10-K.
We do not have any components of other comprehensive income recorded within our condensed consolidated financial statements, and, therefore, do not separately present a statement of comprehensive income in our condensed consolidated financial statements.
Fiscal year 
We operate on a 52/53 week fiscal year ending on the last Wednesday in December. Fiscal 2015 contains 52 weeks and ends on December 30, 2015. Fiscal 2014 contained 53 weeks and ended on December 31, 2014. Unless otherwise stated, references to years in this report relate to fiscal years.
Use of estimates 
The preparation of these condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of sales and expenses during the reporting period. Actual results could differ from those estimates.
Recently issued accounting pronouncements 
In August 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements ("ASU 2015-15"), which clarifies the guidance set forth in Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"), issued in April 2015. ASU 2015-03 requires that debt issuance costs related to a recognized liability be presented on the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected. ASU 2015-15 provides additional guidance regarding debt issuance costs associated with line-of-credit arrangements, stating that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred issuance costs ratably over the term of the line-of-credit arrangement. ASU 2015-03 is effective for reporting periods beginning after December 15, 2015. The adoption of ASU 2015-03 and ASU 2015-15 is not expected to have a material effect our consolidated financial position, results of operations or cash flows.
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 position, results of operations or cash flows.
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. We are currently evaluating the impact ASU 2015-05 will have on our 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. We are currently evaluating the impact ASU 2015-02 will have on our consolidated financial statements.
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 supersedes the existing revenue recognition guidance and clarifies the principles for recognizing revenue. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. In 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 position, results of operations and cash flows.
Inventories (Tables)
Inventories
Inventories as of September 30, 2015 and December 31, 2014 consisted of the following:
 
September 30,
2015
 
December 31,
2014
Food
$
396

 
$
354

Wine
30

 
28

Beer
42

 
33

Beverages
55

 
42

Retail merchandise
84

 
72

Inventories
$
607

 
$
529

Property and Equipment, Net (Tables)
Property, Plant and Equipment
Property and equipment consisted of the following:
 
September 30, 2015
 
December 31, 2014
Leasehold improvements
$
76,067

 
$
58,272

Equipment
15,667

 
12,108

Furniture and fixtures
4,427

 
3,249

Computer equipment and software
4,825

 
3,529

Construction in progress
7,562

 
6,309

 
108,548

 
83,467

Less: accumulated depreciation
(20,571
)
 
(13,343
)
Property and equipment, net
$
87,977

 
$
70,124

Supplemental Balance Sheet Information (Tables)
Supplemental Balance Sheet Information
The components of other current liabilities as of September 30, 2015 and December 31, 2014 are as follows:
 
September 30,
2015
 
December 31,
2014
Sales tax payable
$
1,117

 
$
736

Liability under tax receivable agreement
1,105

 
—

Gift card liability
599

 
625

Other
580

 
388

Other current liabilities
$
3,401

 
$
1,749

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:
 
 
September 30, 2015
 
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
Net income (loss) attributable to Shake Shack Inc.
$
1,528

 
$
(10,022
)
Transfers to non-controlling interests


 



Decrease in retained earnings as a result of the Organizational Transactions
—

 
(1,278
)
 
Increase in additional paid-in capital as a result of the redemption of LLC Interests
777

 
777

Change from net income (loss) attributable to Shake Shack Inc. and transfers to non-controlling interest
$
2,305

 
$
(10,523
)
Equity-Based Compensation (Tables)
Schedule of equity-based compensation expense recognized 
A summary of equity-based compensation expense recognized during the thirteen and thirty-nine weeks ended September 30, 2015 and September 24, 2014 is as follows:
 
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
 
September 30,
2015
 
September 24,
2014
 
September 30,
2015
 
September 24,
2014
Unit appreciation rights
$
—

 
$
—

 
$
11,762

 
$
—

Restricted Class B units
—

 
41

 
605

 
124

Stock options
1,172

 
—

 
3,142

 
—

Equity-based compensation expense
$
1,172

 
$
41

 
$
15,509

 
$
124

Schedule of unit appreciation rights activity 
A summary of UAR activity for the thirty-nine weeks ended September 30, 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 thirty-nine weeks ended September 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:
 
Thirty-Nine Weeks Ended September 30, 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 thirty-nine weeks ended September 30, 2015 is as follows:
 
 
Stock
Options
 
Weighted
Average
Exercise
Price
Outstanding at beginning of period
—

 
$
—

 
Granted
2,622,281

 
21.00

 
Exercised
—

 
—

 
Forfeited
(41,425
)
 
(21.00
)
Outstanding at end of period
2,580,856

 
$
21.00

Income Taxes (Tables)
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 income tax expense recognized is as follows:
 
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
 
September 30,
2015
 
September 24,
2014
 
September 30,
2015
 
September 24,
2014
Income before income taxes
$
7,721

 
$
631

 
$
2,854

 
$
3,911

Less: net loss prior to the Organizational Transactions
—

 
—

 
(13,049
)
 
—

Less: net income attributable to non-controlling interests
4,665

 
—

 
10,100

 
—

 
Income attributable to Shake Shack Inc. before income taxes
3,056

 
631

 
5,803

 
3,911

 
 
 
 
 
 
 
 
 
Income taxes at U.S. federal statutory rate
1,070

 
221

 
2,031

 
1,369

State and local income taxes, net of federal benefit
357

 
48

 
422

 
128

Foreign withholding taxes
70

 
78

 
214

 
237

Non-deductible expenses
31

 
—

 
109

 
—

LLC flow-through structure
—

 
(220
)
 
—

 
(1,368
)
Income tax expense
$
1,528

 
$
127

 
$
2,776

 
$
366

Earnings Per Share (Tables)
Schedule of earnings per share
The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock for the thirteen and thirty-nine weeks ended September 30, 2015 and September 24, 2014.
 
 
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
 
 
September 30,
2015
 
September 24,
2014
 
September 30,
2015
 
September 24,
2014
Numerator:
 
 
 
 
 
 
 
 
Net income
$
6,193

 
$
504

 
$
78

 
$
3,545

 
Less: net income attributable to non-controlling interests
4,665

 
—

 
10,100

 
—

 
Net income (loss) attributable to Shake Shack Inc.
$
1,528

 
$
504

 
$
(10,022
)
 
$
3,545

Denominator:
 
 
 
 
 
 
 
 
Weighted-average shares of Class A common stock outstanding—basic
13,757

 
29,978

 
12,590

 
29,968

 
Effect of dilutive securities:
 
 
 
 
 
 
 
 
 
Restricted Class B units
—

 
126

 
—

 
151

 
 
Stock options
1,028

 
—

 
—

 
—

 
Weighted-average shares of Class A common stock outstanding—diluted
14,785

 
30,104

 
12,590

 
30,119

 
 
 
 
 
 
 
 
 
 
Earnings per share of Class A common stock—basic
$
0.11

 
$
0.02

 
$
(0.80
)
 
$
0.12

Earnings per share of Class A common stock—diluted
$
0.10

 
$
0.02

 
$
(0.80
)
 
$
0.12

Supplemental Cash Flow Information (Tables)
Schedule of Cash Flow Information
The following table sets forth supplemental cash flow information for the thirty-nine weeks ended September 30, 2015 and September 24, 2014:
 
 
Thirty-Nine Weeks Ended
 
 
September 30,
2015
 
September 24,
2014
Cash paid for:
 
 
 
 
Income taxes, net of refunds
$
338

 
$
531

 
Interest
183

 
59

Non-cash investing activities:
 
 
 
 
Accrued purchases of property and equipment
3,682

 
1,304

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

 
—

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
3

 
—

 
Cancellation of Class B common stock in connection with the redemption of LLC Interests
(3
)
 
—

Organization and Nature of Operations - Franchiser (Details)
Sep. 30, 2015
Restaurant
Franchisor Disclosure [Line Items]
 
Number of restaurants
75 
Company-operated |
United States
 
Franchisor Disclosure [Line Items]
 
Number of restaurants
41 
Licensed |
United States
 
Franchisor Disclosure [Line Items]
 
Number of restaurants
5 
Licensed |
Non-United States
 
Franchisor Disclosure [Line Items]
 
Number of restaurants
29 
Organization and 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 8 Months Ended
Feb. 4, 2015
Sep. 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 
 
Organization and Nature of Operations - Organizational Transactions (Details)
0 Months Ended 8 Months Ended
Feb. 4, 2015
Sep. 30, 2015
Class of Stock [Line Items]
 
 
Number of entities acquired
2 
 
Number of LLC interests
5,968,841 
 
Ownership percent of noncontrolling interest
 
42.00% 
Noncontrolling owners ownership percentage
 
58.00% 
Class A Common Stock
 
 
Class of Stock [Line Items]
 
 
Ratio of common stock to limited liability company interest
1 
 
Class A Common Stock |
Common stock
 
 
Class of Stock [Line Items]
 
 
Shares issued during the period
5,968,841 
5,750,000 
Class B Common Stock
 
 
Class of Stock [Line Items]
 
 
Ratio of common stock to limited liability company interest
1 
 
Class B Common Stock |
Common stock
 
 
Class of Stock [Line Items]
 
 
Shares issued during the period
30,160,694 
 
Shares cancelled during the period
5,968,841 
 
Organization and Nature of Operations - Secondary Offering (Details) (USD $)
0 Months Ended 9 Months Ended 8 Months Ended 0 Months Ended 8 Months Ended 1 Months Ended
Feb. 4, 2015
Sep. 30, 2015
Feb. 4, 2015
Sep. 30, 2015
Class A Common Stock
Common stock
Feb. 4, 2015
Common Class B
Common stock
Sep. 30, 2015
Common Class B
Common stock
Aug. 31, 2015
Secondary offering
Aug. 31, 2015
Secondary offering
Class A Common Stock
Common stock
Aug. 31, 2015
Secondary offering
Common Class B
Common stock
Aug. 31, 2015
Limited Liability Company
Secondary offering
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
Total shares offered
 
 
 
 
 
 
 
4,000,000 
 
 
Conversion of units from former equity owners
 
 
 
 
 
 
 
844,727 
 
 
Stock issued during period, conversion of units, shares
 
 
 
3,155,273 
 
(3,155,273)
 
3,155,273 
 
 
Shares issued, share price (in USD per share)
 
 
 
 
 
 
 
$ 60 
 
 
Number Of Units Redeemed
 
 
 
 
 
 
 
 
 
3,155,273 
Shares cancelled during the period
 
 
 
 
5,968,841 
 
 
 
3,155,273 
 
Units acquired during the period
5,968,841 
 
 
 
 
 
3,155,273 
 
 
 
Number of LLC interests
 
15,213,420 
 
 
 
 
 
 
 
 
Ownership percent of noncontrolling interest
 
42.00% 
33.30% 
 
 
 
 
 
 
 
Noncontrolling owners ownership percentage
 
58.00% 
66.70% 
 
 
 
 
 
 
 
Summary of Significant Accounting Policies (Details)
9 Months Ended 12 Months Ended
Sep. 30, 2015
Dec. 31, 2014
Accounting Policies [Abstract]
 
 
Fiscal period duration
364 days 
371 days 
Inventories (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Inventory [Line Items]
 
 
Inventories
$ 607 
$ 529 
Food
 
 
Inventory [Line Items]
 
 
Inventories
396 
354 
Wine
 
 
Inventory [Line Items]
 
 
Inventories
30 
28 
Beer
 
 
Inventory [Line Items]
 
 
Inventories
42 
33 
Beverages
 
 
Inventory [Line Items]
 
 
Inventories
55 
42 
Retail merchandise
 
 
Inventory [Line Items]
 
 
Inventories
$ 84 
$ 72 
Property and Equipment, Net (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Property, Plant and Equipment [Line Items]
 
 
Property, Plant and Equipment, Gross
$ 108,548 
$ 83,467 
Less: accumulated depreciation
(20,571)
(13,343)
Property and equipment, net
87,977 
70,124 
Leasehold improvements
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, Plant and Equipment, Gross
76,067 
58,272 
Equipment
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, Plant and Equipment, Gross
15,667 
12,108 
Furniture and fixtures
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, Plant and Equipment, Gross
4,427 
3,249 
Computer equipment and software
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, Plant and Equipment, Gross
4,825 
3,529 
Construction in progress
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, Plant and Equipment, Gross
$ 7,562 
$ 6,309 
Supplemental Balance Sheet Information - (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Other Liabilities, Current
 
 
Sales tax payable
$ 1,117 
$ 736 
Liability under tax receivable agreement
1,105 
0 
Gift card liability
599 
625 
Other
580 
388 
Other current liabilities
$ 3,401 
$ 1,749 
Debt (Details) (USD $)
9 Months Ended 9 Months Ended 0 Months Ended 1 Months Ended 9 Months Ended 0 Months Ended
Sep. 30, 2015
Sep. 24, 2014
Dec. 31, 2014
Sep. 30, 2015
Notes payable
Dec. 31, 2014
Notes payable
Mar. 31, 2013
Notes payable
Sep. 30, 2015
Letter of credit
Feb. 4, 2015
Revolving Credit Facility
Line of credit
Feb. 28, 2015
Revolving Credit Facility
Line of credit
Sep. 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
Sep. 30, 2015
Revolving Credit Facility
Letter of credit
Line of credit
Feb. 4, 2015
Revolving Credit Facility
Letter of credit
Line of credit
Sep. 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
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
 
 
 
 
 
 
 
 
$ 50,000,000 
 
 
$ 10,000,000 
 
 
 
 
 
Current borrowing capacity
 
 
 
 
 
 
 
 
 
 
20,000,000 
 
80,000 
 
19,920,000 
 
 
 
 
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 
 
 
 
 
 
 
 
Proceeds from revolving credit facility
4,000,000 
5,000,000 
 
 
 
 
 
 
 
4,000,000 
 
 
 
 
 
 
 
 
 
Payments on revolving credit facility
36,000,000 
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 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stockholders' Equity (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
0 Months Ended 9 Months Ended 0 Months Ended 0 Months Ended 9 Months Ended 0 Months Ended 8 Months Ended 0 Months Ended 8 Months Ended 0 Months Ended 0 Months Ended 1 Months Ended
Feb. 4, 2015
Vote
board_of_director_class
Dec. 15, 2014
Sep. 30, 2015
Sep. 24, 2014
Feb. 4, 2015
Dec. 31, 2014
Feb. 4, 2015
Class A Common Stock
Sep. 30, 2015
Class A Common Stock
Feb. 4, 2015
Class A Common Stock
Feb. 4, 2015
Class B Common Stock
Sep. 30, 2015
Class B Common Stock
Feb. 4, 2015
Class B Common Stock
Sep. 30, 2015
IPO
Feb. 4, 2015
Common stock
Class A Common Stock
Sep. 30, 2015
Common stock
Class A Common Stock
Aug. 31, 2015
Common stock
Class A Common Stock
Feb. 4, 2015
Common stock
Class B Common Stock
Sep. 30, 2015
Common stock
Class B Common Stock
Aug. 31, 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
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 usd per share)
 
 
 
 
 
$ 0.01 
 
$ 0.001 
$ 0.001 
 
$ 0.001 
$ 0.001 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock, shares authorized
 
 
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 
 
 
 
Total conversion of units
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,000,000 
 
 
Shares issued, share price (in USD per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 21 
 
$ 60 
 
 
Conversion of units from former equity owners
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
844,727 
 
 
Stock issued during period, conversion of units, shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,155,273 
 
 
(3,155,273)
 
 
 
 
3,155,273 
 
 
Partners' Capital Account, Units, Redeemed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,155,273 
Shares cancelled during the period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,968,841 
 
 
 
 
 
 
3,155,273 
 
Common stock, shares, outstanding
 
 
 
 
 
0 
 
15,213,420 
 
 
21,036,580 
 
 
 
15,213,420 
15,213,420 
 
21,036,580 
21,036,580 
 
 
 
 
 
 
Proceeds of issuance of initial public offering net of underwriting discounts and commissions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 112,298 
 
 
 
 
 
Member distribution threshold, percentage
 
27.30% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Member distributions
$ 11,125 
 
$ 11,125 
$ 5,219 
 
 
 
 
 
 
 
 
$ 11,125 
 
 
 
 
 
 
 
 
 
 
 
 
Non-Controlling Interests (Narrative) (Details)
0 Months Ended 9 Months Ended 0 Months Ended 8 Months Ended 9 Months Ended 1 Months Ended 1 Months Ended
Feb. 4, 2015
Sep. 30, 2015
Feb. 4, 2015
Feb. 4, 2015
Class A Common Stock
Common stock
Sep. 30, 2015
Class A Common Stock
Common stock
Sep. 30, 2015
Class A Common Stock
Common stock
Aug. 31, 2015
Secondary offering
Aug. 31, 2015
Secondary offering
Class A Common Stock
Common stock
Sep. 30, 2015
Limited Liability Company
Aug. 31, 2015
Limited Liability Company
Secondary offering
Noncontrolling Interest [Line Items]
 
 
 
 
 
 
 
 
 
 
Units purchased during the period
5,750,000 
 
 
 
 
 
 
 
 
 
Units acquired during the period
5,968,841 
 
 
 
 
 
3,155,273 
 
 
 
Partners' Capital Account, Units
 
 
 
 
 
 
 
 
36,250,000 
 
LLC interests issued for share-based compensation
339,306 
 
 
 
 
 
 
 
 
 
Issuance of class A common stock in settlement of unit appreciation rights (shares)
 
 
 
339,306 
339,306 
339,306 
 
 
 
 
Partners' Capital Account, Units, Redeemed
 
 
 
 
 
 
 
 
 
3,155,273 
Number of LLC interests
 
15,213,420 
 
 
 
 
 
 
 
 
Stock issued during period, conversion of units, shares
 
 
 
 
3,155,273 
 
 
3,155,273 
 
 
Ownership percent of noncontrolling interest
 
42.00% 
33.30% 
 
 
 
 
 
 
 
Non-Controlling Interests - Schedule of non-controlling interest (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 24, 2014
Sep. 30, 2015
Sep. 24, 2014
Noncontrolling Interest [Line Items]
 
 
 
 
Net income (loss) attributable to Shake Shack Inc.
$ 1,528 
$ 504 
$ (10,022)
$ 3,545 
Change from net income (loss) attributable to Shake Shack Inc. and transfers to non-controlling interest
2,305 
 
(10,523)
 
IPO
 
 
 
 
Noncontrolling Interest [Line Items]
 
 
 
 
(Decrease) in retained earnings and increase in additional paid in capital
0 
 
(1,278)
 
Secondary offering
 
 
 
 
Noncontrolling Interest [Line Items]
 
 
 
 
(Decrease) in retained earnings and increase in additional paid in capital
$ 777 
 
$ 777 
 
Equity-Based Compensation - Schedule of compensation expense recognized (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 24, 2014
Sep. 30, 2015
Sep. 24, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Equity-based compensation expense
$ 1,172 
$ 41 
$ 15,509 
$ 124 
Unit appreciation rights
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Equity-based compensation expense
0 
0 
11,762 
0 
Restricted Class B units
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Equity-based compensation expense
0 
41 
605 
124 
Stock options
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Equity-based compensation expense
$ 1,172 
$ 0 
$ 3,142 
$ 0 
Equity-Based Compensation (Narrative) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 1 Months Ended 9 Months Ended 0 Months Ended 8 Months Ended 9 Months Ended 1 Months Ended 9 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 24, 2014
Sep. 30, 2015
Sep. 24, 2014
Sep. 30, 2015
LLC interests
Sep. 30, 2015
Unit appreciation rights
Sep. 24, 2014
Unit appreciation rights
Sep. 30, 2015
Unit appreciation rights
Sep. 24, 2014
Unit appreciation rights
Sep. 30, 2015
Restricted Class B units
Sep. 24, 2014
Restricted Class B units
Sep. 30, 2015
Restricted Class B units
Sep. 24, 2014
Restricted Class B units
Sep. 30, 2015
Stock options
Sep. 24, 2014
Stock options
Sep. 30, 2015
Stock options
Sep. 24, 2014
Stock options
Feb. 3, 2015
Minimum
Restricted Class B units
Feb. 3, 2015
Maximum
Restricted Class B units
Sep. 30, 2015
2015 Incentive Award Plan
Sep. 30, 2015
2015 Incentive Award Plan
Stock options
Sep. 30, 2015
2015 Incentive Award Plan
Minimum
Stock options
Sep. 30, 2015
2015 Incentive Award Plan
Maximum
Stock options
Feb. 4, 2015
Common stock
Class A Common Stock
Sep. 30, 2015
Common stock
Class A Common Stock
Sep. 30, 2015
Common stock
Class A Common Stock
Sep. 30, 2015
Pro forma
LLC interests
Feb. 3, 2015
Unit Appreciation Rights Plan
Unit appreciation rights
Sep. 30, 2015
Unit Appreciation Rights Plan
Unit appreciation rights
Sep. 30, 2015
Unit Appreciation Rights Plan
Pro forma
LLC interests
Sep. 30, 2015
2015 Incentive Award Plan
Dec. 31, 2014
2015 Incentive Award Plan
Sep. 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 
 
 
 
 
 
Unit appreciation rights vested and settled
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22,554 
767,947 
 
 
 
Weighted average base price of unit appreciation rights vested and settled
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 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 
 
 
 
 
 
 
 
Equity-based compensation expense
$ 1,172 
$ 41 
$ 15,509 
$ 124 
 
$ 0 
$ 0 
$ 11,762 
$ 0 
$ 0 
$ 41 
$ 605 
$ 124 
$ 1,172 
$ 0 
$ 3,142 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Award vesting period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3 years 
5 years 
 
 
1 year 
5 years 
 
 
 
 
 
 
 
 
 
 
Fair value of restricted Class B units vested in the period
 
 
 
 
 
 
 
 
 
 
 
667 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 
 
 
Weighted average exercise price for stock options granted (in USD per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 21.00 
 
 
 
 
 
 
 
 
 
$ 21.00 
 
 
Weighted average grant date fair value of stock options (in USD per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 8.53 
 
 
Stock options outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,580,856 
0 
 
Stock options exercisable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 
 
 
Unrecognized compensation expense (USD)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 19,109 
 
 
Weighted-average period for recognition compensation expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4 years 4 months 
Equity-Based Compensation - Schedule of Unit Appreciation Rights (Details) (Unit Appreciation Rights Plan, Unit appreciation rights vested and settled, USD $)
9 Months Ended
Sep. 30, 2015
Unit Appreciation Rights Plan |
Unit appreciation rights vested and settled
 
UARs
 
Outstanding at beginning of period
22,554 
Granted
0 
Forfeited
0 
Vested and settled
(22,554)
Outstanding at end of period
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 $)
9 Months Ended
Sep. 30, 2015
Restricted Class B units
 
Units
 
Outstanding at beginning of period
7,227 
Granted
0 
Vested
(7,227)
Forfeited
0 
Outstanding at beginning of period
0 
Weighted Average Grant Date Fair Value
 
Outstanding at beginning of period (in USD per share)
$ 92.31 
Granted (in USD per share)
$ 0.00 
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 
Equity-Based Compensation - Schedule of Fair Value of Stock Options (Details) (2015 Incentive Award Plan, Stock options)
9 Months Ended
Sep. 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) (2015 Incentive Award Plan, USD $)
9 Months Ended
Sep. 30, 2015
2015 Incentive Award Plan
 
Stock Options
 
Outstanding at beginning of period
0 
Granted
2,622,281 
Exercised
0 
Forfeited
(41,425)
Outstanding at end of period
2,580,856 
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 
Income Taxes - Reconciliation of income tax expense (Details) (USD $)
In Thousands, unless otherwise specified
1 Months Ended 3 Months Ended 8 Months Ended 9 Months Ended
Feb. 3, 2015
Sep. 30, 2015
Sep. 24, 2014
Sep. 30, 2015
Sep. 30, 2015
Sep. 24, 2014
Income Tax Disclosure [Abstract]
 
 
 
 
 
 
Income before income taxes
 
$ 7,721 
$ 631 
 
$ 2,854 
$ 3,911 
Less: net loss prior to the Organizational Transactions
(13,049)
6,193 
504 
13,127 
78 
3,545 
Less: net loss attributable to non-controlling interests
 
4,665 
0 
 
10,100 
0 
Income attributable to Shake Shack Inc. before income taxes
 
3,056 
631 
 
5,803 
3,911 
Income taxes at U.S. federal statutory rate
 
1,070 
221 
 
2,031 
1,369 
State and local income taxes, net of federal benefit
 
357 
48 
 
422 
128 
Foreign withholding taxes
 
70 
78 
 
214 
237 
Non-deductible expenses
 
31 
0 
 
109 
0 
LLC flow-through structure
 
0 
(220)
 
0 
(1,368)
Income tax expense
 
$ 1,528 
$ 127 
 
$ 2,776 
$ 366 
Income Taxes (Narrative) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
0 Months Ended 9 Months Ended
Feb. 4, 2015
Sep. 30, 2015
Sep. 24, 2014
Sep. 30, 2015
Pro forma
Sep. 30, 2015
IPO
Aug. 31, 2015
Secondary offering
Income Tax Contingency [Line Items]
 
 
 
 
 
 
Effective income tax rate, percent
 
 
 
61.60% 
 
 
Percentage of tax benefits due to equity owners
 
 
 
 
85.00% 
 
Member distributions
$ 11,125 
$ 11,125 
$ 5,219 
 
$ 11,125 
 
Deferred tax asset, tax receivable agreement
 
 
 
 
6,006 
102,719 
Tax receivable agreement liability
 
$ 92,416 
 
 
$ 5,105 
$ 87,311 
Number of LLC interests
 
15,213,420 
 
 
 
 
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 8 Months Ended 9 Months Ended
Feb. 3, 2015
Sep. 30, 2015
Sep. 24, 2014
Sep. 30, 2015
Sep. 30, 2015
Sep. 24, 2014
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
 
 
Less: net loss prior to the Organizational Transactions
$ (13,049)
$ 6,193 
$ 504 
$ 13,127 
$ 78 
$ 3,545 
Less: net loss attributable to non-controlling interests
 
4,665 
0 
 
10,100 
0 
Net income (loss) attributable to Shake Shack Inc.
 
$ 1,528 
$ 504 
 
$ (10,022)
$ 3,545 
Denominator:
 
 
 
 
 
 
Weighted-average shares of Class A common stock outstanding/weighted-average units outstanding—basic (shares)
 
13,757 1
29,978 1
 
12,590 1
29,968 1
Effect of dilutive securities:
 
 
 
 
 
 
Weighted-average shares of Class A common stock outstanding/weighted-average units outstanding—diluted (shares)
 
14,785 1
30,104 1
 
12,590 1
30,119 1
Earnings per share of Class A common stock/earnings per unit—basic (in USD per share)
 
$ 0.11 1
$ 0.02 1
 
$ (0.80)1
$ 0.12 1
Earnings per share of Class A common stock/earnings per unit—diluted (in USD per share)
 
$ 0.10 1
$ 0.02 1
 
$ (0.80)1
$ 0.12 1
Restricted Stock
 
 
 
 
 
 
Effect of dilutive securities:
 
 
 
 
 
 
Incremental common shares
 
0 
126 
 
0 
151 
Stock options
 
 
 
 
 
 
Effect of dilutive securities:
 
 
 
 
 
 
Incremental common shares
 
1,028 
0 
 
0 
0 
Earnings Per Share - Narrative (Details)
0 Months Ended 8 Months Ended 9 Months Ended
Feb. 4, 2015
Sep. 30, 2015
Sep. 30, 2015
Stock options
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Antidilutive shares
 
 
2,580,856 
Class B Common Stock
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Antidilutive shares
 
 
21,036,580 
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 
 
 
Supplemental Cash Flow Information (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Sep. 24, 2014
Cash paid for:
 
 
Income taxes, net of refunds
$ 338 
$ 531 
Interest
183 
59 
Non-cash investing activities:
 
 
Accrued purchases of property and equipment
3,682 
1,304 
IPO |
Class A Common Stock
 
 
Non-cash investing activities:
 
 
Class A common stock issued
6 
0 
IPO |
Class B Common Stock
 
 
Non-cash financing activities:
 
 
Cancellation of Class B common stock
(6)
0 
Secondary offering |
Class A Common Stock
 
 
Non-cash investing activities:
 
 
Class A common stock issued
3 
0 
Secondary offering |
Class B Common Stock
 
 
Non-cash financing activities:
 
 
Cancellation of Class B common stock
$ (3)
$ 0 
Commitments and Contingencies (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Retail site
Dec. 31, 2013
Office building
Sep. 30, 2015
Letter of credit
Loss Contingencies [Line Items]
 
 
 
Letters of credit outstanding
$ 160 
$ 80 
 
Renewal term
 
 
1 year 
Related Party Transactions (Details) (USD $)
12 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2015
Dec. 31, 2014
USHG
Sep. 30, 2015
USHG
Sep. 30, 2015
USHG
Management fee
Sep. 24, 2014
USHG
Management fee
Sep. 30, 2015
USHG
Management fee
Sep. 24, 2014
USHG
Management fee
Sep. 24, 2014
USHG
Rent expense
Sep. 24, 2014
USHG
Rent expense
Sep. 30, 2015
USHG
Self insurance health care expense
Sep. 24, 2014
USHG
Self insurance health care expense
Sep. 30, 2015
USHG
Self insurance health care expense
Sep. 24, 2014
USHG
Self insurance health care expense
Sep. 30, 2015
Hudson Yards Sports and Entertainment
renewal_option
Sep. 30, 2015
Hudson Yards Sports and Entertainment
Concession income
Sep. 24, 2014
Hudson Yards Sports and Entertainment
Concession income
Sep. 30, 2015
Hudson Yards Sports and Entertainment
Concession income
Sep. 24, 2014
Hudson Yards Sports and Entertainment
Concession income
Dec. 31, 2014
Hudson Yards Sports and Entertainment
Concession income
Sep. 30, 2015
Madison Square Park Conservancy
Rent expense
Sep. 24, 2014
Madison Square Park Conservancy
Rent expense
Sep. 30, 2015
Madison Square Park Conservancy
Rent expense
Sep. 24, 2014
Madison Square Park Conservancy
Rent expense
Dec. 31, 2014
Madison Square Park Conservancy
Rent expense
Sep. 30, 2015
IPO
Aug. 31, 2015
Secondary offering
Related Party Transaction [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Management fee
 
2.50% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses from transactions with related party
 
 
 
$ 0 
$ 686,000 
$ 0 
$ 1,975,000 
$ 0 
$ 38,000 
$ 0 
$ 311,000 
$ 188,000 
$ 913,000 
 
 
 
 
 
 
$ 331,000 
$ 204,000 
$ 442,000 
$ 487,000 
 
 
 
Amounts due to related parties
 
238,000 
7,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Due from Related Parties, Current
 
0 
10,000 
 
 
 
 
 
 
 
 
 
 
 
63,000 
 
63,000 
 
0 
 
 
 
 
 
 
 
Number of renewal terms
 
 
 
 
 
 
 
 
 
 
 
 
 
5 
 
 
 
 
 
 
 
 
 
 
 
 
Renewal option period
 
 
 
 
 
 
 
 
 
 
 
 
 
5 years 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue from related parties
 
 
 
 
 
 
 
 
 
 
 
 
 
 
157,000 
122,000 
252,000 
206,000 
 
 
 
 
 
 
 
 
Due to MSP Conservancy, Current
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
187,000 
 
187,000 
 
0 
 
 
Percentage of tax benefits due to equity owners
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
85.00% 
 
Tax receivable agreement liability
$ 92,416,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 5,105,000 
$ 87,311,000