SHAKE SHACK INC., 10-K filed on 2/26/2018
Annual Report
Document and Entity Information Document (USD $)
12 Months Ended
Dec. 27, 2017
Jun. 28, 2017
Feb. 14, 2018
Class A Common Stock
Feb. 14, 2018
Class B Common Stock
Document Information [Line Items]
 
 
 
 
Document type
10-K 
 
 
 
Amendment flag
false 
 
 
 
Document period end date
Dec. 27, 2017 
 
 
 
Document fiscal year focus
2017 
 
 
 
Document fiscal period focus
Q4 
 
 
 
Entity registrant name
Shake Shack Inc. 
 
 
 
Entity central index key
0001620533 
 
 
 
Current fiscal year end date
--12-27 
 
 
 
Entity filer category
Large Accelerated Filer 
 
 
 
Entity current reporting status
Yes 
 
 
 
Entity common stock, shares outstanding (in shares)
 
 
27,078,149 
9,701,815 
Entity Public Float
 
$ 778,146,403 
 
 
Entity Well-known Seasoned Issuer
No 
 
 
 
Entity Voluntary Filers
No 
 
 
 
CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Dec. 27, 2017
Dec. 28, 2016
Current assets:
 
 
Cash and cash equivalents
$ 21,507 
$ 11,607 
Marketable securities
63,036 
62,040 
Accounts receivable
5,641 
6,006 
Inventories
1,258 
806 
Prepaid expenses and other current assets
1,757 
3,485 
Total current assets
93,199 
83,944 
Property and equipment, net
187,095 
136,264 
Deferred income taxes, net
185,914 
313,207 
Other assets
4,398 
4,779 
TOTAL ASSETS
470,606 
538,194 
Current liabilities:
 
 
Accounts payable
8,210 
6,921 
Accrued expenses
11,649 
8,538 
Accrued wages and related liabilities
6,228 
6,084 
Other current liabilities
7,937 
10,173 
Total current liabilities
34,024 
31,716 
Deemed landlord financing
14,518 
2,007 
Deferred rent
36,596 
31,107 
Liabilities under tax receivable agreement, net of current portion
158,436 
267,902 
Other long-term liabilities
2,553 
4,109 
Total liabilities
246,127 
336,841 
Commitments and contingencies
   
   
Stockholders' equity:
 
 
Preferred stock, no par value—10,000,000 shares authorized; none issued and outstanding as of December 27, 2017 and December 28, 2016, respectively.
0 
0 
Additional paid-in capital
153,105 
135,448 
Retained earnings
16,399 
16,719 
Accumulated other comprehensive loss
(49)
(15)
Total stockholders' equity attributable to Shake Shack Inc. / members' equity
169,492 
152,188 
Non-controlling interests
54,987 
49,165 
Total equity
224,479 
201,353 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
470,606 
538,194 
Class A common stock, $0.001 par value—200,000,000 shares authorized; 26,527,477 and 25,151,384 shares issued and outstanding as of December 27, 2017 and December 28, 2016, respectively.
 
 
Stockholders' equity:
 
 
Common stock
27 
25 
Class B common stock, $0.001 par value—35,000,000 shares authorized; 10,250,007 and 11,253,592 shares issued and outstanding as of December 27, 2017 and December 28, 2016, respectively.
 
 
Stockholders' equity:
 
 
Common stock
$ 10 
$ 11 
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
Dec. 27, 2017
Dec. 28, 2016
Feb. 4, 2015
Preferred stock, par value (in dollars per share)
$ 0 
$ 0 
 
Preferred stock, shares authorized (in shares)
10,000,000 
10,000,000 
10,000,000 
Preferred stock, shares issued (in shares)
0 
0 
 
Preferred stock, shares outstanding (in shares)
0 
0 
 
Class A Common Stock
 
 
 
Common stock par value (in dollars per share)
$ 0.001 
$ 0.001 
$ 0.001 
Common stock, shares authorized (in shares)
200,000,000 
200,000,000 
200,000,000 
Common stock, shares, issued (in shares)
26,527,477 
25,151,384 
 
Common stock, shares, outstanding (in shares)
26,527,477 
25,151,384 
 
Class B Common Stock
 
 
 
Common stock par value (in dollars per share)
$ 0.001 
$ 0.001 
$ 0.001 
Common stock, shares authorized (in shares)
35,000,000 
35,000,000 
35,000,000 
Common stock, shares, issued (in shares)
10,250,007 
11,253,592 
 
Common stock, shares, outstanding (in shares)
10,250,007 
11,253,592 
 
CONSOLIDATED STATEMENTS OF INCOME (LOSS) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Income Statement [Abstract]
 
 
 
Shack sales
$ 346,388 
$ 259,350 
$ 183,219 
Licensing revenue
12,422 
9,125 
7,373 
TOTAL REVENUE
358,810 
268,475 
190,592 
Shack-level operating expenses:
 
 
 
Food and paper costs
98,337 
73,752 
54,079 
Labor and related expenses
91,740 
65,540 
44,752 
Other operating expenses
35,805 
24,946 
16,307 
Occupancy and related expenses
28,197 
21,820 
15,207 
General and administrative expenses
39,003 
30,556 
37,825 
Depreciation expense
21,704 
14,502 
10,222 
Pre-opening costs
9,603 
9,520 
5,430 
Loss on disposal of property and equipment
608 
34 
17 
TOTAL EXPENSES
324,997 
240,670 
183,839 
OPERATING INCOME
33,813 
27,805 
6,753 
Other income, net
128,123 
1,065 
7 
Interest expense
(1,643)
(374)
(332)
INCOME BEFORE INCOME TAXES
160,293 
28,496 
6,428 
Income tax expense
151,409 
6,350 
3,304 
NET INCOME
8,884 
22,146 
3,124 
Less: net income attributable to non-controlling interests
9,204 
9,700 
11,900 
Net income (loss) attributable to Shake Shack Inc.
$ (320)
$ 12,446 
$ (8,776)
Earnings (loss) per share of Class A common stock
 
 
 
Basic (in dollars per share)
$ (0.01)
$ 0.54 
$ (0.65)
Diluted (in dollars per share)
$ (0.01)
$ 0.53 
$ (0.65)
Weighted-average shares of Class A common stock outstanding
 
 
 
Basic (shares)
25,876 
22,956 
13,588 
Diluted (shares)
25,876 
23,449 
13,588 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Statement of Comprehensive Income [Abstract]
 
 
 
Net income
$ 8,884 
$ 22,146 
$ 3,124 
Available-for-sale securities:
 
 
 
Change in net unrealized holding (losses)
(94)1
(35)1
(11)1
Less: reclassification adjustments for net realized losses included in net income
47 1
19 1
0 1
Net change
(47)1
(16)1
(11)1
OTHER COMPREHENSIVE LOSS, NET OF TAX
(47)
(16)
(11)
COMPREHENSIVE INCOME
8,837 
22,130 
3,113 
Less: comprehensive income attributable to non-controlling interests
9,191 
9,694 
11,894 
COMPREHENSIVE INCOME ATTRIBUTABLE TO SHAKE SHACK INC.
$ (354)
$ 12,436 
$ (8,781)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) (USD $)
12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Statement of Comprehensive Income [Abstract]
 
 
 
Comprehensive income net of tax benefit
$ 0 
$ 0 
$ 0 
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' AND MEMBERS' EQUITY (USD $)
In Thousands, except Share data, unless otherwise specified
Total
USD ($)
Class A Common Stock
Class B Common Stock
Members' Equity
USD ($)
Common stock
Class A Common Stock
USD ($)
Common stock
Class B Common Stock
USD ($)
Additional Paid-In Capital
USD ($)
Retained Earnings
USD ($)
Accumulated Other Comprehensive Loss
USD ($)
Non- Controlling Interest
USD ($)
Secondary Offering and Redemption of Units
USD ($)
Secondary Offering and Redemption of Units
Common stock
Class A Common Stock
USD ($)
Secondary Offering and Redemption of Units
Common stock
Class B Common Stock
USD ($)
Secondary Offering and Redemption of Units
Additional Paid-In Capital
USD ($)
Secondary Offering and Redemption of Units
Non- Controlling Interest
USD ($)
USC Merger
USD ($)
USC Merger
Common stock
Class A Common Stock
USD ($)
USC Merger
Common stock
Class B Common Stock
USD ($)
USC Merger
Additional Paid-In Capital
USD ($)
USC Merger
Non- Controlling Interest
USD ($)
Beginning balance at Dec. 31, 2014
$ 12,600 
 
 
$ 12,600 
$ 0 
$ 0 
$ 0 
$ 0 
$ 0 
$ 0 
 
 
 
 
 
 
 
 
 
 
Beginning balance (in shares) at Dec. 31, 2014
 
 
 
 
0 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss prior to the Organizational Transactions
(13,049)
 
 
(13,049)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive loss:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net unrealized losses related to available-for-sale securities
(11)
 
 
 
 
 
 
 
(5)
(6)
 
 
 
 
 
 
 
 
 
 
Member distributions
(11,125)
 
 
(11,125)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity-based compensation recognized prior to the Organizational Transactions
7,731 
 
 
7,731 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issuance of Class A common stock sold in initial public offering, net of underwriting discounts, commissions and offering costs (in shares)
 
 
 
 
5,750,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issuance of Class A common stock sold in initial public offering, net of underwriting discounts, commissions and offering costs
109,262 
 
 
 
6 
 
109,256 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issuance of class A common stock in settlement of unit appreciation rights (in shares)
 
 
 
 
339,306 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issuance of Class A common stock in settlement of unit appreciation rights
0 
 
 
 
 
 
987 
 
 
(987)
 
 
 
 
 
 
 
 
 
 
Effect of the Organizational Transactions
30 
 
 
3,843 
6 
24 
(75,182)
 
 
71,339 
 
 
 
 
 
 
 
 
 
 
Effect of the Organizational Transactions (in shares)
 
 
 
 
5,968,841 
24,191,853 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income subsequent to the Organizational Transactions
16,173 
 
 
 
 
 
 
4,273 
 
11,900 
 
 
 
 
 
 
 
 
 
 
Equity-based compensation
4,314 
 
 
 
 
 
4,314 
 
 
 
 
 
 
 
 
 
 
 
 
 
Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis
31,094 
 
 
 
 
 
31,094 
 
 
 
 
 
 
 
 
 
 
 
 
 
Redemptions (in shares)
 
 
 
 
 
 
 
 
 
 
 
(6,003,308)
(6,003,308)
 
 
 
(1,727,804)
(1,727,804)
 
 
Redemptions
 
 
 
 
 
 
 
 
 
 
0 
6 
(6)
19,934 
(19,934)
0 
2 
(2)
5,908 
(5,908)
Net income
3,124 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance at Dec. 30, 2015
157,019 
 
 
0 
20 
16 
96,311 
4,273 
(5)
56,404 
 
 
 
 
 
 
 
 
 
 
Ending balance (in shares) at Dec. 30, 2015
 
 
 
 
19,789,259 
16,460,741 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive loss:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net unrealized losses related to available-for-sale securities
(16)
 
 
 
 
 
 
 
(10)
(6)
 
 
 
 
 
 
 
 
 
 
Equity-based compensation
5,493 
 
 
 
 
 
5,493 
 
 
 
 
 
 
 
 
 
 
 
 
 
Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis
15,833 
 
 
 
 
 
15,833 
 
 
 
 
 
 
 
 
 
 
 
 
 
Redemptions (in shares)
 
 
 
 
(5,207,149)
 
 
 
 
 
 
(5,207,149)
(5,207,149)
 
 
 
 
 
 
 
Redemptions
 
 
 
 
 
 
 
 
 
 
0 
5 
(5)
16,986 
(16,986)
 
 
 
 
 
Net income
22,146 
 
 
 
 
 
 
12,446 
 
9,700 
 
 
 
 
 
 
 
 
 
 
Stock option exercises (in shares)
 
 
 
 
154,976 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock option exercises
3,197 
 
 
 
0 
 
795 
 
 
2,402 
 
 
 
 
 
 
 
 
 
 
Income tax effect of stock compensation plans
33 
 
 
 
 
 
30 
 
 
3 
 
 
 
 
 
 
 
 
 
 
Distributions paid and payable to non-controlling interest holders
(2,352)
 
 
 
 
 
 
 
 
(2,352)
 
 
 
 
 
 
 
 
 
 
Ending balance at Dec. 28, 2016
201,353 
 
 
0 
25 
11 
135,448 
16,719 
(15)
49,165 
 
 
 
 
 
 
 
 
 
 
Ending balance (in shares) at Dec. 28, 2016
 
25,151,384 
11,253,592 
 
25,151,384 
11,253,592 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive loss:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net unrealized losses related to available-for-sale securities
(47)
 
 
 
 
 
 
 
(34)
(13)
 
 
 
 
 
 
 
 
 
 
Member distributions
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity-based compensation
5,732 
 
 
 
 
 
5,732 
 
 
 
 
 
 
 
 
 
 
 
 
 
Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis
3,059 
 
 
 
 
 
3,059 
 
 
 
 
 
 
 
 
 
 
 
 
 
Redemptions (in shares)
 
 
 
 
(1,003,585)
 
 
 
 
 
 
(1,003,585)
(1,003,585)
 
 
 
 
 
 
 
Redemptions
 
 
 
 
 
 
 
 
 
(4,415)
0 
1 
(1)
4,415 
 
 
 
 
 
 
Net income
8,884 
 
 
 
 
 
 
(320)
 
9,204 
 
 
 
 
 
 
 
 
 
 
Stock option exercises (in shares)
 
 
 
 
372,508 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock option exercises
7,270 
 
 
 
1 
 
4,451 
 
 
2,818 
 
 
 
 
 
 
 
 
 
 
Distributions paid and payable to non-controlling interest holders
(1,772)
 
 
 
 
 
 
 
 
(1,772)
 
 
 
 
 
 
 
 
 
 
Ending balance at Dec. 27, 2017
$ 224,479 
 
 
$ 0 
$ 27 
$ 10 
$ 153,105 
$ 16,399 
$ (49)
$ 54,987 
 
 
 
 
 
 
 
 
 
 
Ending balance (in shares) at Dec. 27, 2017
 
26,527,477 
10,250,007 
 
26,527,477 
10,250,007 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
OPERATING ACTIVITIES
 
 
 
Net income (loss) (including amounts attributable to non-controlling interests)
$ 8,884,000 
$ 22,146,000 
$ 3,124,000 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation expense
21,704,000 
14,502,000 
10,222,000 
Equity-based compensation
5,623,000 
5,354,000 
16,681,000 
Deferred income taxes
146,334,000 
(523,000)
(734,000)
Non-cash interest expense
317,000 
304,000 
273,000 
Excess tax benefits on equity-based compensation
0 
(33,000)
0 
Loss on sale of marketable securities
5,000 
18,000 
0 
Loss on disposal of property and equipment
608,000 
34,000 
17,000 
Other non-cash income
(127,221,000)
(688,000)
0 
Changes in operating assets and liabilities:
 
 
 
Accounts receivable
6,421,000 
2,974,000 
775,000 
Inventories
(452,000)
(263,000)
(14,000)
Prepaid expenses and other current assets
2,244,000 
(756,000)
(958,000)
Other assets
(446,000)
(822,000)
1,293,000 
Accounts payable
1,235,000 
839,000 
201,000 
Accrued expenses
4,388,000 
5,560,000 
2,548,000 
Accrued wages and related liabilities
144,000 
280,000 
3,394,000 
Other current liabilities
(988,000)
2,130,000 
257,000 
Deferred rent
1,008,000 
3,415,000 
4,363,000 
Other long-term liabilities
1,070,000 
(186,000)
(184,000)
NET CASH PROVIDED BY OPERATING ACTIVITIES
70,878,000 
54,285,000 
41,258,000 
INVESTING ACTIVITIES
 
 
 
Purchases of property and equipment
(61,533,000)
(54,433,000)
(32,117,000)
Purchases of marketable securities
(7,861,000)
(61,266,000)
(2,397,000)
Sales of marketable securities
7,451,000 
938,000 
0 
NET CASH USED IN INVESTING ACTIVITIES
(61,943,000)
(114,761,000)
(34,514,000)
FINANCING ACTIVITIES
 
 
 
Payments on promissory note
0 
(313,000)
0 
Proceeds from Revolving Credit Facility
0 
0 
4,000,000 
Payments on Revolving Credit Facility
0 
0 
(36,000,000)
Proceeds from deemed landlord financing
1,183,000 
65,000 
0 
Payments on deemed landlord financing
(266,000)
0 
0 
Deferred financing costs
0 
0 
(103,000)
Proceeds from issuance of Class A common stock sold in initial public offering, net of underwriting discounts, commissions and offering costs
0 
0 
109,262,000 
Proceeds from issuance of Class B common stock
0 
0 
30,000 
Distributions paid to non-controlling interest holders
(2,379,000)
(1,745,000)
0 
Distributions paid to members prior to the initial public offering
0 
0 
(11,125,000)
Payments under tax receivable agreement
(4,844,000)
0 
0 
Proceeds from stock option exercises
7,585,000 
3,194,000 
0 
Employee withholding taxes related to net settled equity awards
(314,000)
0 
(4,636,000)
Excess tax benefits from equity-based compensation
0 
33,000 
0 
NET CASH PROVIDED BY FINANCING ACTIVITIES
965,000 
1,234,000 
61,428,000 
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
9,900,000 
(59,242,000)
68,172,000 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
11,607,000 
70,849,000 
2,677,000 
CASH AND CASH EQUIVALENTS AT END OF PERIOD
$ 21,507,000 
$ 11,607,000 
$ 70,849,000 
NATURE OF OPERATIONS
NATURE OF OPERATIONS
NATURE OF OPERATIONS
 
Shake Shack Inc. was formed on September 23, 2014 as a Delaware corporation for the purpose of facilitating an initial public offering and other related transactions in order to carry on the business of SSE Holdings, LLC and its subsidiaries. Unless the context otherwise requires, references to "we," "us," "our," "Shake Shack" and the "Company" refer to Shake Shack Inc. and its subsidiaries, including SSE Holdings, LLC, which we refer to as "SSE Holdings."
We operate and license Shake Shack restaurants ("Shacks"), which serve hamburgers, hot dogs, chicken, crinkle cut fries, shakes, frozen custard, beer, wine and more. As of December 27, 2017, there were 159 Shacks in operation, system-wide, of which 90 were domestic company-operated Shacks, 10 were domestic licensed Shacks and 59 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 (as amended, the "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 for LLC Interests and (iii) appoint Shake Shack Inc. as the sole managing member of SSE Holdings. See Note 11.
▪
We amended and restated our certificate of incorporation to, among other things, (i) provide for Class B common stock with voting rights but no economic interests (where "economic interests" means the right to receive any distributions or dividends, whether cash or stock, in connection with common stock) and (ii) issue shares of Class B common stock to the then-existing holders of SSE Holdings on a one-to-one basis with the number of LLC Interests they own. See Note 11.
▪
We acquired, by merger, two entities that were owned by former indirect members of SSE Holdings, 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 non-controlling interest holders subsequent to the Merger owned the remaining 66.7% of SSE Holdings. As a result of the Organizational Transactions, we became the sole managing member of SSE Holdings and, although we had a minority economic interest in SSE Holdings, we had the sole voting power in, and control the management of, SSE Holdings. Accordingly, we consolidated the financial results of SSE Holdings and reported a non-controlling interest in our consolidated financial statements.
As the Organizational Transactions are considered transactions between entities under common control, the financial statements for periods prior to the IPO and Organizational Transactions have been adjusted to combine the previously separate entities for presentation purposes.
Secondary Offering
In August 2015, we completed a secondary offering of 4,000,000 shares of our Class A common stock at a price of $60.00 per share. All of the shares sold in the offering were offered by certain non-controlling interest holders. We did not receive any proceeds from the sale of shares of Class A common stock offered by the aforementioned non-controlling interest holders. The shares sold in the offering consisted of (i) 844,727 existing shares of Class A common stock held 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 non-controlling interest holders that participated in the offering. Simultaneously, and in connection with the redemption, 3,155,273 shares of Class B common stock were surrendered by non-controlling interest holders and canceled. Additionally, in connection with the redemption, we received 3,155,273 LLC Interests, increasing our total ownership interest in SSE Holdings.
USC Merger
Pursuant to a Stockholders Agreement, dated as of February 4, 2015, as amended, by and among Daniel H. Meyer and his affiliates (the "Meyer Group") and other parties thereto, the Meyer Group has the right to cause all of the stock of Union Square Cafe Corp. ("USC") and Gramercy Tavern Corp. ("GT") to be converted into and exchanged for shares of our Class A common stock pursuant to a tax-free reorganization (each, a "Reorganization"). In December 2015, the Meyer Group exercised their right with respect to USC. The Reorganization was structured as a two-step merger, whereby (i) a newly-formed wholly-owned subsidiary of the Company merged with and into USC, then (ii) USC merged with and into the Company (the foregoing transactions are collectively referred to as the "USC Merger"). Prior to the USC Merger, USC owned 1,727,804 LLC Interests and an equivalent number of shares of our Class B common stock. In the USC Merger, (i) 1,727,804 shares of Class A common stock were issued to the stockholders of USC, with each stockholder receiving newly-issued shares of Class A common stock in an amount equivalent to the number of shares of USC held by such stockholders; (ii) 1,727,804 shares of Class B common stock held by USC were cancelled; and (iii) 1,727,804 LLC Interests held by USC were transferred to us.
As of December 27, 2017, we owned 72.1% of SSE Holdings and the non-controlling interest holders own the remaining 27.9% of SSE Holdings.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include our accounts and the accounts of our subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior period amounts to conform to the current year presentation.
SSE Holdings is considered a variable interest entity. Shake Shack Inc. is the primary beneficiary as we have the majority economic interest in SSE Holdings and, as the sole managing member, have decision making authority that significantly affects the economic performance of the entity, while the limited partners have no substantive kick-out or participating rights. As a result, we will continue to consolidate SSE Holdings. The assets and liabilities of SSE Holdings represent substantially all of our consolidated assets and liabilities with the exception of certain deferred taxes and liabilities under the Tax Receivable Agreement. As of December 27, 2017 and December 28, 2016, the net assets of SSE Holdings were $197,301 and $158,845, respectively. The assets of SSE Holdings are subject to certain restrictions in SSE Holdings' revolving credit agreements. See Note 8 for more information.
Fiscal Year
We operate on a 52/53 week fiscal year ending on the last Wednesday in December. Fiscal year 2017 contained 52 weeks and ended on December 27, 2017. Fiscal year 2016 contained 52 weeks and ended on December 28, 2016. Fiscal year 2015 contained 52 weeks and ended on December 30, 2015. Unless otherwise stated, references to years in this report relate to fiscal years.
Use of Estimates
The preparation of these consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of sales and expenses during the reporting period. Actual results could differ from those estimates.
Segment Reporting
We own and operate Shacks in the United States. We also have domestic and international licensed operations. Our chief operating decision maker (the "CODM") is our Chief Executive Officer. As the CODM reviews financial performance and allocates resources at a consolidated level on a recurring basis, we have one operating segment and one reportable segment.
Fair Value Measurements
We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, we assume the highest and best use of the asset by market participants in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions, and credit risk.
Assets and liabilities are classified using a fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
▪
Level 1 - Quoted prices in active markets for identical assets or liabilities
▪
Level 2 - Observable inputs other than quoted prices in active markets for identical assets or liabilities, quoted prices for identical assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities
▪
Level 3 - Inputs that are both unobservable and significant to the overall fair value measurements reflecting an entity's estimates of assumptions that market participants would use in pricing the asset or liability
Cash and Cash Equivalents
Cash and cash equivalents consist primarily of cash on hand, deposits with banks, and short-term, highly liquid investments that have original maturities of three months or less. Cash equivalents are stated at cost, which approximates fair value. Cash equivalents consist primarily of money market funds.
Accounts Receivable
Accounts receivable consist primarily of receivables from landlords for tenant improvement allowances, receivables from our licensees for licensing revenue and related reimbursements, credit card receivables and vendor rebates. We evaluate the collectibility of our accounts receivable based on a variety of factors, including historical experience, current economic conditions and other factors.
Inventories
Inventories, which consist of food, beer, wine, other beverages and retail merchandise, are stated at the lower of cost or net realizable value with cost determined on a first-in, first-out basis. No adjustment is deemed necessary to reduce inventory to net realizable value due to the rapid turnover and high utilization of inventory.
Property and Equipment
Property and equipment is stated at historical cost less accumulated depreciation. Property and equipment is depreciated based on the straight-line method over the estimated useful lives of the assets, generally ranging from three to seven years for equipment, furniture and fixtures, and computer equipment and software. Leasehold improvements are depreciated over the shorter of their estimated useful life or the related lease life, generally ranging from 10 to 15 years. Landlord funded assets are depreciated over the shorter of their estimated useful life or the related lease life, generally ranging from 10 to 15 years. For leases with renewal periods at our option, we use the original lease term, excluding renewal option periods, to determine estimated useful lives.
Costs incurred when constructing Shacks are capitalized. The cost of repairs and maintenance are expensed when incurred. Costs for refurbishments and improvements that significantly increase the productive capacity or extend the useful life of the asset are capitalized. When assets are disposed of, the resulting gain or loss is recognized on the Consolidated Statements of Income (Loss).
We assess potential impairments to our long-lived assets, which includes property and equipment, whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of an asset is measured by a comparison of the carrying amount of an asset group to its estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset exceeds the fair value of the asset. There were no impairment charges recorded in fiscal 2017, 2016 and 2015.
Deferred Financing Costs
Deferred financing costs incurred in connection with the issuance of long-term debt and establishing credit facilities are capitalized and amortized to interest expense based on the related debt agreements. Deferred financing costs are included in other assets on the Consolidated Balance Sheets.
Other Assets
Other assets consist primarily of long-term marketable securities, security deposits, transferable liquor licenses and certain custom furniture pre-ordered for future Shacks and yet to be placed in service.
The costs of obtaining non-transferable liquor licenses that are directly issued by local government agencies for nominal fees are expensed as incurred. The costs of purchasing transferable liquor licenses through open markets in jurisdictions with a limited number of authorized liquor licenses are capitalized as indefinite-lived intangible assets. Annual liquor license renewal fees are expensed over the renewal term. As of December 27, 2017 and December 28, 2016, indefinite-lived intangible assets relating to transferable liquor licenses totaled $894 and $701, respectively. We evaluate our indefinite-lived intangible assets for impairment annually during our fiscal fourth quarter, and whenever events or changes in circumstances indicate that an impairment may exist. When evaluating other intangible assets for impairment, we may first perform a qualitative assessment to determine whether it is more likely than not that an intangible asset group is impaired. If we do not perform the qualitative assessment, or if we determine that it is not more likely than not that the fair value of the intangible asset group exceeds its carrying amount, we calculate the estimated fair value of the intangible asset group. If the carrying amount of the intangible asset group exceeds the estimated fair value, an impairment charge is recorded to reduce the carrying value to the estimated fair value. In addition, we continuously monitor and may revise our intangible asset useful lives if and when facts and circumstances change.
Equity-based Compensation
Equity-based compensation expense is measured based on fair value. For awards with graded-vesting features and service conditions only, compensation expense is recognized on a straight-line basis over the total requisite service period for the entire award. For awards with graded-vesting features and a combination of service and performance conditions, compensation expense is recognized using a graded-vesting attribution method over the vesting period based on the most probable outcome of the performance conditions. Forfeitures are recognized as they occur for all equity awards. Equity-based compensation expense is included within general and administrative expenses and labor and related expenses on the Consolidated Statements of Income (Loss).
Leases
We lease all of our domestic company-operated Shacks, our home office and certain equipment under various non-cancelable lease agreements that expire on various dates through 2035. Generally, our real estate leases have initial terms ranging from 10 to 15 years and typically include two five-year renewal options. At the inception of each lease, we determine its classification as an operating or capital lease. Most of our leases are classified as operating leases and typically provide for fixed minimum rent payments and/or contingent rent payments based upon sales in excess of specified thresholds. When the achievement of such sales thresholds are deemed to be probable, contingent rent is accrued in proportion to the sales recognized during the period. For operating leases that include rent holidays and rent escalation clauses, we recognize rent expense on a straight-line basis over the lease term from the date we take possession of the leased property. The difference between the straight-line rent amounts and amounts payable under the lease agreements is recorded as deferred rent and is included as rent expense in occupancy and related expenses on the Consolidated Statements of Income (Loss). Rent expense incurred before a Shack opens is recorded in pre-opening costs. Once a domestic company-operated Shack opens, we record the straight-line rent expense and any contingent rent, if applicable, in occupancy and related expenses on the Consolidated Statements of Income (Loss).
Many of our leases also require us to pay real estate taxes, common area maintenance costs and other occupancy costs which are included in occupancy and related expenses on the Consolidated Statements of Income (Loss).
We expend cash for leasehold improvements to build out and equip our leased premises. Generally, a portion of the leasehold improvements and building costs are reimbursed by our landlords as landlord incentives pursuant to agreed-upon terms in our lease agreements. If obtained, landlord incentives usually take the form of up-front cash, full or partial credits against our future minimum or contingent rents otherwise payable by us, or a combination thereof. When contractually due, we classify landlord incentives as deferred rent on the Consolidated Balance Sheets and amortize the landlord incentives on a straight-line basis over the lease term as a reduction of occupancy costs and related expenses or pre-opening costs on the Consolidated Statements of Income (Loss).
Lease Financing Arrangements
In certain leasing arrangements, due to our involvement in the construction of the leased assets, we are considered the owner of the leased assets for accounting purposes. In such cases, in addition to capitalizing our own construction costs, we capitalize the construction costs funded by the landlord related to our leased premises, and also recognize a corresponding liability for those costs as deemed landlord financing. If, upon completion of construction, the arrangement does not meet the sales recognition criteria under the sale-leaseback accounting guidance, we are precluded from de-recognizing the landlord-funded asset and related financing obligation and continue to account for the landlord-funded asset as if we were the legal owner. If de-recognition is permitted we are required to account for the lease as either an operating or capital lease.
As of December 27, 2017, we were deemed to be the accounting owner of 23 leased Shacks, 11 of which were under construction as of the end of the period. As of December 28, 2016, we were deemed to be the accounting owner of eight leased Shacks, all of which were under construction as of the end of the period.
Revenue Recognition
Revenue consists of Shack sales and licensing revenue. Revenue from Shack sales are presented net of discounts and recognized when food and beverage products are sold. Sales tax collected from customers is excluded from Shack sales and the obligation is included in sales tax payable until the taxes are remitted to the appropriate taxing authorities. Revenue from our gift cards are deferred and recognized upon redemption. Licensing revenues include initial territory fees, restaurant opening fees, and ongoing licensing fees from licensed Shacks. Initial territory fees are recorded as deferred revenue when received and recognized as revenue on a straight-line basis over the term of the licensing agreement. Restaurant opening fees are recorded as deferred revenue when received, and recognized as revenue when a licensed Shack is opened and all material services and conditions related to the fee have been substantially performed. Ongoing licensing fees from these Shacks are based on a percentage of sales and are recognized as revenue as the fees are earned and become receivable from the licensee.
Income Taxes
We account for income taxes pursuant to the asset and liability method which requires the recognition of deferred income tax assets and liabilities related to the expected future tax consequences arising from temporary differences between the carrying amounts and tax bases of assets and liabilities based on enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse. Any effects of changes in income tax rates or laws are included in income tax expense in the period of enactment. A valuation allowance is recognized if we determine it is more likely than not that all or a portion of a deferred tax asset will not be recognized.
Pre-Opening Costs
Pre-opening costs are expensed as incurred and consist primarily of legal fees, marketing expenses, occupancy, manager and employee wages, travel and related training costs incurred prior to the opening of a Shack.
Advertising
The cost of advertising is expensed as incurred. Advertising costs amounted to $357, $147 and $149 in fiscal 2017, 2016 and 2015, respectively, and are included in general and administrative expense and other operating expenses on the Consolidated Statements of Income (Loss).
Recently Adopted Accounting Pronouncements     
We adopted the Accounting Standards Updates (“ASUs”) summarized below in fiscal 2017. The effects of adoption did not have a material impact on our consolidated financial statements.
Accounting Standards Update (“ASU”)
Description
Date
Adopted
Improvements to Employee Share-Based Payment Accounting
(ASU 2016-09)


This standard simplifies certain aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, certain classifications on the statement of cash flows, and an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur. Upon adoption, we made such policy election. The adoption methodology applied varied based on each applicable provision of the standard, and none of the provisions had a material impact on our consolidated financial statements.

December 29, 2016

Simplifying the Measurement of Inventory (ASU 2015-11)


This standard applies to inventory measured using methods other than last-in, first-out (LIFO) or the retail method, and requires entities to measure such inventory at the lower of cost or net realizable value. It was applied prospectively.



December 29, 2016


Recently Issued Accounting Pronouncements       
Accounting Standards Update (“ASU”)
Description
Expected Impact
Effective Date
Statement of Cash Flows: Classification of Certain Cash Receipts and Payments
(ASU 2016-15)

This standard provides guidance on eight specific cash flow issues with the objective of reducing diversity in practice. It should be applied retrospectively to each period presented, subject to certain conditions.
We do not expect this standard to have a material impact on our consolidated financial statements.




December 28, 2017

Recognition and Measurement of Financial Assets and Financial Liabilities
(ASU 2016-01)
For public business entities, this standard requires: (i) certain equity investments to be measured at fair value with changes in fair value recognized in net income; (ii) a qualitative assessment to identify impairment of equity investments without readily determinable fair values; (iii) elimination of the requirement to disclose the method(s) and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost on the balance sheet; (iv) use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (v) separate presentation in other comprehensive income of the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (vi) separate presentation of financial assets and liabilities by measurement category and form of financial asset in the financial statements; and (vii) an entity to evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. The standard should be applied by means of a cumulative-effect adjustment to the balance sheet at the beginning of the fiscal year of adoption. Early adoption is permitted, subject to certain conditions resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value.


We do not expect this standard to have a material impact on our consolidated financial statements.

December 28, 2017
Leases
(ASU 2016-02, 2018-01)

This standard establishes a new lease accounting model, which introduces the recognition of lease assets and liabilities for those leases classified as operating leases under previous GAAP. It should be applied using a modified retrospective approach, with the option to elect various practical expedients. Early adoption is permitted.


We are currently evaluating the impact this standard will have on our consolidated financial statements. We have developed an implementation project plan, and are in process of identifying the complete population of leases to be analyzed under the new standard. We plan to adopt the standard on December 27, 2018.

December 27, 2018

Accounting Standards Update (“ASU”)
Description
Expected Impact
Effective Date
Revenue from Contracts with Customers and related standards (ASU’s 2014-09, 2015-14, 2016-08, 2016-10, 2016-12, 2016-20)
This standard supersedes the existing revenue recognition guidance and provides a new framework for recognizing revenue. The core principle of the standard 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. The new standard also requires significantly more comprehensive disclosures than the existing standard. Guidance subsequent to ASU 2014-09 has been issued to clarify various provisions in the standard, including principal versus agent considerations, identifying performance obligations, licensing transactions, as well as various technical corrections and improvements. This standard may be adopted using either a retrospective or modified retrospective method. Early adoption is permitted.

We are substantially complete with our evaluation of the impact this standard is expected to have on our consolidated financial statements.

Licensing revenue
Revenue recognition related to sales-based royalties, which represents a significant portion of the licensing revenue balance, will not change from current policy. However, the pattern and timing of revenue recognition related to the fixed fees associated with our licensing agreements (such as restaurant opening and initial territory fees) will differ from current policy.
Currently, restaurant opening fees are recorded as deferred revenue when received and proportionate amounts are recognized as revenue when a licensed Shack is opened and all material services and conditions related to the fee have been substantially performed. Territory fees are recorded as deferred revenue when received and recognized as revenue on a straight-line basis over the term of the license agreement, which generally begins upon execution of the contract.
Under the new standard, the license granted to each restaurant under each existing contract is considered a performance obligation. All other promises (such as providing assistance during the opening of a restaurant) will be combined with the license as one performance obligation. Accordingly, we will allocate the total transaction price (comprised of the restaurant opening and territory fees) to each restaurant expected to be opened by the licensee under the contract. We will recognize the fee allocated to each restaurant as revenue on a straight-line basis over the restaurant’s license term, which generally begins when the restaurant opens.

Shack sales
We do not currently expect a significant impact to Shack sales as a result of the new revenue standard.

Adoption and transition adjustment
We plan to adopt the standard on December 28, 2017, utilizing a modified retrospective transition approach. The adoption will result in a decrease to retained earnings of approximately $1,574 on the transition date, with a corresponding increase of $1,769 in other long-term liabilities, a decrease of $68 in other current liabilities, an increase of $100 to accounts receivable, with the remaining impact representing the tax impact of the transition adjustment, as an increase to deferred tax assets.
December 28, 2017

FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS
 
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following tables present information about our financial assets and liabilities measured at fair value on a recurring basis as of December 27, 2017 and December 28, 2016, and indicate the classification within the fair value hierarchy. Refer to Note 2 for further information.
Cash, Cash Equivalents and Marketable Securities
The following tables summarize our cash, cash equivalents and marketable securities by significant investment categories as of December 27, 2017 and December 28, 2016:
 
 
December 27, 2017
 
 
Cost Basis

 
 Gross Unrealized Gains

 
 Gross Unrealized Losses

 
 Fair Value

 
 Cash and Cash Equivalents

 
Marketable Securities

Cash
$
16,138

 
$
—

 
$
—

 
$
16,138

 
$
16,138

 
$
—

Level 1:
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
5,369

 
—

 
—

 
5,369

 
5,369

 
—

 
Mutual funds
60,985

 
61

 
(122
)
 
60,924

 
—

 
60,924

Level 2:
 
 
 
 
 
 
 
 
 
 
 
 
Corporate debt securities(1)
2,125

 
2

 
(15
)
 
2,112

 
—

 
2,112

Total
$
84,617

 
$
63

 
$
(137
)
 
$
84,543

 
$
21,507

 
$
63,036


 
 
December 28, 2016
 
 
Cost Basis

 
 Gross Unrealized Gains

 
 Gross Unrealized Losses

 
 Fair Value

 
 Cash and Cash Equivalents

 
Marketable Securities

Cash
$
6,322

 
$
—

 
$
—

 
$
6,322

 
$
6,322

 
$
—

Level 1:
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
5,285

 
—

 
—

 
5,285

 
5,285

 
—

 
Mutual funds
60,232

 
—

 
—

 
60,232

 
—

 
60,232

Level 2:
 
 
 
 
 
 
 
 
 
 
 
 
Corporate debt securities(1)
2,473

 
3

 
(30
)
 
2,446

 
—

 
2,446

Total
$
74,312

 
$
3

 
$
(30
)
 
$
74,285

 
$
11,607

 
$
62,678


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

Net unrealized losses on available-for-sale securities totaling $74 and $27 were included in accumulated other comprehensive loss on the Consolidated Balance Sheet as of December 27, 2017 and December 28, 2016, respectively.
The following tables summarize the gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 27, 2017 and December 28, 2016, aggregated by investment category and the length of time that individual securities have been in a continuous loss position:
 
 
December 27, 2017
 
 
 
Less than 12 Months
 
 
12 Months or Greater
 
 
Total
 
 
Fair Value

 
Unrealized Loss

 
Fair Value

 
Unrealized Loss

 
Fair Value

 
Unrealized Loss

 
Money market funds
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
Mutual funds
—

 
—

 
—

 
—

 
—

 
—

 
Corporate debt securities
1,675

 
(12
)
 
162

 
(3
)
 
1,837

 
(15
)
Total
$
1,675

 
$
(12
)
 
$
162

 
$
(3
)
 
$
1,837

 
$
(15
)
 
 
December 28, 2016
 
 
 
Less than 12 Months
 
 
12 Months or Greater
 
 
Total
 
 
Fair Value

 
Unrealized Loss

 
Fair Value

 
Unrealized Loss

 
Fair Value

 
Unrealized Loss

 
Money market funds
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
Mutual funds
—

 
—

 
—

 
—

 
—

 
—

 
Corporate debt securities
1,244

 
(10
)
 
540

 
(20
)
 
1,784

 
(30
)
Total
$
1,244

 
$
(10
)
 
$
540

 
$
(20
)
 
$
1,784

 
$
(30
)

A summary of other income from available-for-sale securities recognized during fiscal 2017, 2016 and 2015 is as follows:
 
2017

 
2016

 
2015

Available-for-sale securities:
 
 
 
 
 
 
Dividend income
$
830

 
$
296

 
$
—

 
Interest income
77

 
88

 
7

 
Loss on investments
(5
)
 
(7
)
 
—

Total other income, net
$
902

 
$
377

 
$
7


A summary of available-for-sale securities sold and gross realized gains and losses recognized during fiscal 2017 and 2016 is as follows:
 
2017

2016

Available-for-sale securities:
 
 
 
Gross proceeds from sales and redemptions
$
2,223

$
938

 
Cost basis of sales and redemptions
2,271

956

 
Gross realized gains included in net income
1

2

 
Gross realized losses included in net income
(49
)
(20
)
 
Amounts reclassified out of accumulated other comprehensive loss
47

19


No available-for-sale securities were sold or redeemed during fiscal 2015. Realized gains and losses are determined on a specific identification method and are included in other income, net on the Consolidated Statements of Income (Loss).
The following table summarizes the estimated fair value of our investments in marketable debt securities, accounted for as available-for-sale securities and classified by the contractual maturity date of the securities:
 
December 27
2017

Due within one year
$
2,112

Due after one year through 5 years
—

Due after 5 years through 10 years
—

Due after 10 years
—

Total
$
2,112


We periodically review our marketable securities for other-than-temporary impairment. We consider factors such as the duration, severity and the reason for the decline in value, the potential recovery period and our intent to sell. For our debt securities, we also consider whether (i) it is more likely than not that we will be required to sell the debt securities before recovery of their amortized cost basis, and (ii) the amortized cost basis cannot be recovered as a result of credit losses. As of December 27, 2017 and December 28, 2016, the declines in the market value of our marketable securities investment portfolio are considered to be temporary in nature.
Other Financial Instruments
The carrying value of our financial instruments, including accounts receivable, accounts payable, and accrued expenses as of December 27, 2017 and December 28, 2016 approximated their fair value due to the short-term nature of these financial instruments.
Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
Assets and liabilities that are measured at fair value on a non-recurring basis include our long-lived assets and indefinite-lived intangible assets. There were no impairments recognized during fiscal 2017, 2016 and 2015.
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE
 
The components of accounts receivable as of December 27, 2017 and December 28, 2016 are as follows:
 
December 27
2017

 
December 28
2016

Landlord receivables
$
1,660

 
$
2,606

Licensing receivables
1,422

 
1,278

Credit card receivables
2,018

 
1,589

Other receivables
541

 
533

Accounts receivable
$
5,641

 
$
6,006


As of December 27, 2017 and December 28, 2016, no allowance for doubtful accounts was recorded based on our evaluation of collectibility.
INVENTORIES
INVENTORIES
INVENTORIES
 
Inventories consisted of the following:
 
December 27
2017

 
December 28
2016

Food
$
874

 
$
543

Wine
69

 
47

Beer
85

 
58

Beverages
111

 
79

Retail merchandise
119

 
79

Inventories
$
1,258

 
$
806

PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT
 
Property and equipment consisted of the following:
 
December 27
2017

 
December 28
2016

Leasehold improvements
$
166,963

 
$
120,629

Landlord funded assets
7,472

 
—

Equipment
31,608

 
23,194

Furniture and fixtures
10,128

 
7,342

Computer equipment and software
12,721

 
8,710

Construction in progress (includes assets under construction from deemed landlord financing)
16,458

 
13,510

Property and equipment, gross
245,350

 
173,385

Less: accumulated depreciation
(58,255
)
 
(37,121
)
Property and equipment, net
$
187,095

 
$
136,264


Depreciation expense was $21,704, $14,502 and $10,222 for fiscal 2017, 2016 and 2015, respectively.
SUPPLEMENTAL BALANCE SHEET INFORMATION
SUPPLEMENTAL BALANCE SHEET INFORMATION
SUPPLEMENTAL BALANCE SHEET INFORMATION
 
The components of other current liabilities as of December 27, 2017 and December 28, 2016 are as follows:
 
December 27
2017

 
December 28
2016

Sales tax payable
$
1,813

 
$
1,324

Current portion of liabilities under tax receivable agreement
937

 
4,580

Gift card liability
1,472

 
1,153

Other
3,715

 
3,116

Other current liabilities
$
7,937

 
$
10,173

DEBT
DEBT
DEBT
 
In January 2015, we executed a Third Amended and Restated Credit Agreement, which became effective on February 4, 2015 (together with the prior agreements and amendments, and as further amended, the "Revolving Credit Facility"), which provides for a total revolving 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. In May 2016, the Revolving Credit Facility was amended to, among other things, lower the borrowing rates. Borrowings under the Revolving Credit Facility bear interest at either: (i) LIBOR plus a percentage ranging from 2.3% to 3.3% or (ii) the prime rate plus a percentage ranging from 0.0% to 0.8%, depending on the type of borrowing made under the Revolving Credit Facility. As of December 27, 2017 and December 28, 2016, there were no amounts outstanding under the Revolving Credit Facility. As of December 27, 2017, we had $19,317 of availability under the Revolving Credit Facility, after giving effect to $683 in outstanding letters of credit.
The Revolving Credit Facility is secured by a first-priority security interest in substantially all of the assets of SSE Holdings and the guarantors. The obligations under the Revolving Credit Facility are guaranteed by each of SSE Holdings' wholly-owned domestic subsidiaries (with certain exceptions).
The Revolving Credit Facility contains a number of covenants that, among other things, limit our ability to, subject to specified exceptions, incur additional debt; incur additional liens and contingent liabilities; sell or dispose of assets; merge with or acquire other companies; liquidate or dissolve ourselves; pay dividends or make distributions; engage in businesses that are not in a related line of business; make loans, advances or guarantees; engage in transactions with affiliates; and make investments. In addition, the Revolving Credit Facility contains certain cross-default provisions. We are required to maintain a specified consolidated fixed-charge coverage ratio and a specified funded net debt to adjusted EBITDA ratio, both as defined under the Revolving Credit Facility. As of December 27, 2017, 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. During the fiscal year ended December 28, 2016, we repaid the entire outstanding balance of the promissory note. No amounts were outstanding as of December 27, 2017 and December 28, 2016 .
As of December 27, 2017 and December 28, 2016 we had deemed landlord financing liabilities of $14,518 and $2,007, respectively, for certain leases where we are involved in the construction of leased assets and are considered the accounting owner of the construction project. Refer to Note 9 for further details regarding these leases.
Total interest costs incurred were $1,806, $374 and $440 in fiscal 2017, 2016 and 2015, respectively. Amounts capitalized into property and equipment were $164 and $108 during fiscal 2017 and 2015, respectively. No amounts were capitalized into property and equipment during fiscal 2016.
LEASES
LEASES
LEASES
 
A summary of rent expense under operating lease agreements is as follows:
 
 
2017

 
2016

 
2015

Minimum rent
$
20,421

 
$
15,408

 
$
10,796

Deferred rent
838

 
2,122

 
1,482

Contingent rent
4,902

 
4,294

 
2,959

Total rent expense
$
26,161

 
$
21,824

 
$
15,237


The rent expense above does not include common area maintenance costs, real estate taxes and other occupancy costs, which were $4,570, $3,229 and $2,119 in fiscal 2017, 2016 and 2015, respectively.
As of December 27, 2017, future minimum lease payments under non-cancelable operating leases and lease financing arrangements consisted of the following:
 
Operating
Leases

 
Deemed Landlord Financing(1)

2018
$
24,123

 
$
3,679

2019
26,045

 
4,614

2020
25,817

 
4,695

2021
26,076

 
4,747

2022
26,506

 
4,816

Thereafter
143,244

 
27,438

Total minimum lease payments
$
271,811

 
$
49,989


(1)
Amounts include minimum lease payments for 11 leases under construction as of December 27, 2017 where we are deemed the accounting owner. Final classification of lease payments under deemed landlord financing is subject to change pending sale lease-back analysis performed at the store opening date.

As of December 27, 2017, we had 23 leases where we are involved in the construction of the leased assets and have been deemed the accounting owner of the construction project. The deemed landlord financing liability related to these leases was $14,518 as of December 27, 2017. As of December 28, 2016, we had eight leases where we are involved in the construction of the leased assets and have been deemed the accounting owner of the construction project. The deemed landlord financing liability related to those leases was $2,007 as of December 28, 2016.
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS
 
Deferred Compensation
During fiscal 2013, we entered into an incentive bonus agreement with one of our executives, whereby the executive is entitled to receive a deferred compensation award in the amount of $2,450, payable by us in March 2018, and is included in other current liabilities on the Consolidated Balance Sheet. In fiscal 2013, we recorded $2,054 of deferred compensation expense to recognize the present value of the incentive bonus liability, which is included in other long-term liabilities on the Consolidated Balance Sheet. The deferred compensation expense is included within general and administrative expense on the Consolidated Statement of Income (Loss). There was no such expense in fiscal 2017, 2016 or 2015. The difference between the present value of the bonus liability and the amount payable is accreted to interest expense over the remaining term until the incentive bonus becomes payable. In September 2015, we established a grantor trust, commonly referred to as a "rabbi trust," for the purpose of funding our deferred compensation obligation. We contributed $2,450 to the trust in October 2015. Assets held by the trust are subject to creditor claims in the event of insolvency, but are not available for general corporate purposes. As of December 27, 2017, amounts held by the trust were invested in various marketable securities classified as available-for-sale and recognized at fair value on the Consolidated Balance Sheet. See Note 3.
Defined Contribution Plan
Our employees are eligible to participate in a defined contribution savings plan maintained by Union Square Hospitality Group, LLC, a related party. The plan is funded by employee and employer contributions. We pay our share of the employer contributions directly to the third party trustee. Employer contributions to the plan are at our discretion. Effective January 2014, we began making contributions matching a portion of participants' contributions. We match 100% of participants' contributions for the first 3% of eligible compensation contributed and 50% of contributions made in excess of 3% of eligible compensation up to 5% of eligible compensation. Employer contributions totaled $389, $257 and $238 for fiscal 2017, 2016 and 2015, respectively.
STOCKHOLDER'S EQUITY
STOCKHOLDER'S EQUITY
STOCKHOLDERS' EQUITY
 
Amendment and Restatement of Certificate of Incorporation
On February 4, 2015, we amended and restated our certificate of incorporation to, among other things, provide for the (i) authorization of 200,000,000 shares of Class A common stock with a par value of $0.001 per share; (ii) authorization of 35,000,000 shares of Class B common stock with a par value of $0.001 per share; (iii) authorization of 10,000,000 shares of undesignated preferred stock that may be issued from time to time by our Board of Directors in one or more series; and (iv) establishment of a classified board of directors, divided into three classes, each of whose members will serve for staggered three-year terms.
Holders of our Class A and Class B common stock are entitled to one vote per share and, except as otherwise required, will vote together as a single class on all matters on which stockholders generally are entitled to vote. Holders of our Class B common stock are not entitled to receive dividends and will not be entitled to receive any distributions upon the liquidation, dissolution or winding up of the Company. Shares of Class B common stock may only be issued to the extent necessary to maintain the one-to-one ratio between the number of LLC Interests held by the non-controlling interest holders and the number of shares of Class B common stock held by the non-controlling interest holders. 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 of any of the outstanding LLC Interests.
We must, at all times, maintain a one-to-one ratio between the number of outstanding shares of Class A common stock and the number of LLC Interests owned by us (subject to certain exceptions for treasury shares and shares underlying certain convertible or exchangeable securities).
Initial Public Offering
As described in Note 1, on February 4, 2015, we completed an IPO of 5,750,000 shares of our Class A common stock at a public offering price of $21.00 per share, which includes 750,000 shares issued pursuant to the underwriters' over-allotment option. We received $112,298 in proceeds, net of underwriting discounts and commissions, which we used to purchase newly-issued LLC Interests from SSE Holdings at a price per interest equal to the initial public offering price of our Class A common stock.
In connection with our IPO, we issued 30,160,694 shares of Class B common stock to the non-controlling interest holders.
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 non-controlling interest holders for LLC Interests.
The SSE Holdings 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 non-controlling interest holders and the number of LLC Interests owned by the non-controlling interest holders.
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 certain of the non-controlling interest holders. We did not receive any proceeds from the sale of shares of Class A common stock. The shares sold in the offering consisted of (i) 844,727 existing shares of Class A common stock and (ii) 3,155,273 newly-issued shares of Class A common stock issued in connection with the redemption of 3,155,273 LLC Interests. Simultaneously, and in connection with the secondary offering, 3,155,273 shares of Class B common stock were surrendered and cancelled.
Mergers
As described in Note 1, we acquired, by merger, two entities that were owned by former indirect members of SSE Holdings, for which we issued 5,968,841 shares of Class A common stock as merger consideration. In connection with these mergers, 5,968,841 shares of Class B common stock were canceled and we received 5,968,841 of LLC Interests. Additionally, in December 2015, the Meyer Group exercised their right to effect of tax-free reorganization of USC pursuant to the Stockholders Agreement. Prior to the USC Merger, USC owned 1,727,804 LLC Interests and an equivalent number of shares of our Class B common stock. In connection with the USC Merger, (i) 1,727,804 shares of Class A common stock were issued to the stockholders of USC, with each stockholder receiving newly-issued shares of Class A common stock in an amount equivalent to the number of shares of USC held by such stockholders; (ii) 1,727,804 shares of Class B common stock held by USC were cancelled; and (iii) 1,727,804 LLC Interests held by USC were transferred to us.
Member Distributions
On December 15, 2014, the Board of Directors of SSE Holdings approved a special distribution to its members, to the extent the gross proceeds from the IPO exceeded the anticipated gross proceeds (including as a result of the exercise by the underwriters of their option to purchase additional shares of Class A common stock), in an amount equal to the product of (i) the increased gross proceeds and (ii) 0.273, to be paid from the proceeds of the IPO (the "Special Distribution"). On February 4, 2015, SSE Holdings paid the Special Distribution to certain of the then-existing members in the amount of $11,125.
Redemptions of LLC Interests
During fiscal 2017, an aggregate of 1,003,585 LLC Interests were redeemed by the non-controlling interest holders. Pursuant to the SSE Holdings LLC Agreement, we issued 1,003,585 shares of Class A common stock in connection with these redemptions and received 1,003,585 LLC Interests, increasing our ownership interest in SSE Holdings. Simultaneously, and in connection with these redemptions, 1,003,585 shares of Class B common stock were surrendered and cancelled.
During fiscal 2016, an aggregate of 5,207,149 LLC Interests were redeemed by the non-controlling interest holders. Pursuant to the SSE Holdings LLC Agreement, we issued 5,207,149 shares of Class A common stock in connection with these redemptions and received 5,207,149 LLC Interests, increasing our ownership interest in SSE Holdings. Simultaneously, and in connection with these redemptions, 5,207,149 shares of Class B common stock were surrendered and cancelled.
Stock Option Exercises
We received an aggregate of 372,508 and 154,976 LLC Interests in connection with the exercise of employee stock options during fiscal 2017 and 2016, respectively. 
Dividend Restrictions
We are a holding company with no direct operations. As a result, our ability to pay cash dividends on our common stock, if any, is dependent upon cash dividends, distributions or other transfers from SSE Holdings. The amounts available to us to pay cash dividends are subject to certain covenants and restrictions set forth in the Revolving Credit Facility. As of December 27, 2017, essentially all of the net assets of SSE Holdings were restricted. See Note 8 for more information regarding the covenants and restrictions set forth in the Revolving Credit Facility.
NON-CONTROLLING INTERESTS
NON-CONTROLLING INTERESTS
NON-CONTROLLING INTERESTS
 
In connection with the Organizational Transactions described in Note 11, on February 4, 2015 we became the sole managing member of SSE Holdings and, as a result, consolidate the financial results of SSE Holdings. We report a non-controlling interest representing the economic interest in SSE Holdings held by the other members of SSE Holdings. The SSE Holdings LLC Agreement provides that holders of LLC Interests may, from time to time, require SSE Holdings to redeem all or a portion of their LLC Interests for newly-issued shares of Class A common stock on a one-for-one basis. In connection with any redemption or exchange, we will receive a corresponding number of LLC Interests, increasing our total ownership interest in SSE Holdings. Changes in our ownership interest in SSE Holdings while we retain our controlling interest in SSE Holdings will be accounted for as equity transactions. As such, future redemptions or direct exchanges of LLC Interests in SSE Holdings by the other members of SSE Holdings will result in a change in ownership and reduce the amount recorded as non-controlling interest and increase additional paid-in capital.
The following table summarizes the ownership interest in SSE Holdings as of December 27, 2017 and December 28, 2016:
 
2017
 
 
2016
 
 
LLC Interests

 
Ownership %

 
LLC Interests

 
Ownership %

Number of LLC Interests held by Shake Shack Inc.
26,527,477

 
72.1
%
 
25,151,384

 
69.1
%
Number of LLC Interests held by non-controlling interest holders
10,250,007

 
27.9
%
 
11,253,592

 
30.9
%
Total LLC Interests outstanding
36,777,484

 
100.0
%
 
36,404,976

 
100.0
%

The weighted average ownership percentages for the applicable reporting periods are used to attribute net income and other comprehensive loss between Shake Shack Inc. and the non-controlling interest holders. The non-controlling interest holders' weighted average ownership percentage for fiscal 2017 and 2016 was 29.4% and 36.8%, respectively.
The following table summarizes the effects of changes in ownership in SSE Holdings on our equity during fiscal 2017, 2016 and 2015.
 
2017

 
2016

 
2015

Net income (loss) attributable to Shake Shack Inc.
$
(320
)
 
$
12,446

 
$
(8,776
)
Other comprehensive loss:
 
 
 
 
 
 
Unrealized holding losses on available-for-sale securities
(34
)
 
(10
)
 
(5
)
Transfers (to) from non-controlling interests:
 
 
 
 
 
 
Increase in additional paid-in capital as a result of settlement of unit appreciation rights
—

 
—

 
987

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

 
—

 
(75,182
)
 
Increase in additional paid-in capital as a result of the redemption of LLC Interests
4,415

 
16,986

 
19,934

 
Increase in additional paid-in capital as a result of the USC Merger
—

 
—

 
5,908

 
Increase in additional paid-in capital as a result of stock option exercises and the related income tax effect
4,451

 
825

 
—

Total effect of changes in ownership interest on equity attributable to Shake Shack Inc.
$
8,512

 
$
30,247

 
$
(57,134
)

In February 2015, we used the net proceeds from our IPO to purchase 5,750,000 newly-issued LLC Interests. Additionally, in connection with our IPO, we acquired 5,968,841 LLC Interests through the acquisition, by merger, of two entities that were owned by former indirect members of SSE Holdings. Pursuant to the SSE Holdings LLC Agreement, we received 339,306 LLC Interests as a result of the issuance of 339,306 shares of Class A common stock upon settlement of the outstanding UARs.
In December 2015, we received 1,727,804 LLC Interests in connection with the USC Merger in exchange for an equivalent number of newly-issued shares of Class A common stock.
During 2016, an aggregate of 5,207,149 LLC Interests were redeemed by the non-controlling interest holders, and we received 5,207,149 LLC Interests, increasing our total ownership interest is SSE Holdings to 69.1%. During fiscal 2017, an aggregate of 1,003,585 LLC Interests were redeemed by the non-controlling interest holders for newly-issued shares of Class A common stock, and we received 1,003,585 LLC Interests, increasing our total ownership interest in SSE Holdings to 72.1%.
We received an aggregate of 372,508 and 154,976 LLC Interests in connection with the exercise of employee stock options during fiscal 2017 and 2016, respectively.
EQUITY-BASED COMPENSATION
EQUITY-BASED COMPENSATION
EQUITY-BASED COMPENSATION
 
A summary of equity-based compensation expense recognized during fiscal 2017, 2016 and 2015 is as follows:
 
 
2017

 
2016

 
2015

Unit appreciation rights
$
—

 
$
—

 
$
11,762

Restricted Class B units
—

 
—

 
605

Stock options
3,474

 
4,262

 
4,314

Performance stock units
1,869

 
1,092

 
—

Restricted stock units
280

 
—

 
—

Equity-based compensation expense
$
5,623

 
$
5,354

 
$
16,681

 
 
 
 
 
 
Total income tax benefit recognized related to equity-based compensation
$
198

 
$
168

 
$
482


Amounts are included in general and administrative expense and labor and related expenses on the Consolidated Statements of Income (Loss). We capitalized $109 and $139 of equity-based compensation in fiscal 2017 and 2016, respectively. No amounts were capitalized in fiscal 2015.
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. Our IPO constituted a qualifying transaction under the terms of the UAR Plan, and as a result 339,306 shares of Class A common stock were issued upon the settlement of the 22,554 outstanding UARs, net of employee withholding taxes. We recognized compensation expense of $11,762 during fiscal 2015 upon settlement of the outstanding UARs.
There were no UARs outstanding as of December 27, 2017 or December 28, 2016. No compensation expense was recognized during fiscal 2017 and 2016.
Restricted Class B Units
Prior to the IPO, we granted restricted Class B units to certain of our executive officers. These awards were to vest in equal installments over periods ranging from three to five years. If not already fully vested, these units would fully vest (i) upon the occurrence of a change in control event or (ii) upon the occurrence of an initial public offering. The IPO constituted a transaction under the terms of the restricted Class B unit award agreements that resulted in the accelerated vesting of all then-outstanding awards, and we recognized $605 of equity-based compensation expense upon the vesting of these awards during fiscal 2015.
There were no restricted Class B units outstanding as of December 27, 2017 or December 28, 2016. No compensation expense was recorded during fiscal 2017 and 2016.
Stock Options
In January 2015, we adopted the 2015 Incentive Award Plan (the "2015 Plan") under which we may grant up to 5,865,522 stock options and other equity-based awards to employees, directors and officers. The stock options granted generally vest equally over periods ranging from one to five years. We do not use cash to settle any of our equity-based awards, and we issue new shares of Class A common stock upon the exercise of stock options.
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:
 
2017

 
2016

 
2015

Expected term (years)(1)
7.5

 
5.5

 
7.5

Expected volatility(2)
44.5
%
 
50.7
%
 
35.1
%
Risk-free interest rate(3)
2.1
%
 
1.5
%
 
1.6
%
Dividend yield(4)
—
%
 
—
%
 
—
%
(1)
Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method.
(2)
Expected volatility is based on the historical volatility of a selected peer group over a period equivalent to the expected term.
(3)
The risk-free rate rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term.
(4)
We have assumed a dividend yield of zero as we have no plans to declare dividends in the foreseeable future.
A summary of stock option activity for fiscal years 2017, 2016 and 2015 is as follows:
 
 
Stock
Options

 
Weighted
Average
Exercise
Price

 
Aggregate Intrinsic Value

 
Weighted Average Remaining Contractual Life (Years)
Outstanding as of December 31, 2014
—

 
$
—

 
 
 
 
 
Granted
2,622,281

 
21.00

 
 
 
 
 
Exercised
—

 
—

 
 
 
 
 
Forfeited
(47,300
)
 
(21.00
)
 
 
 
 
 
Expired
—

 
—

 
 
 
 
Outstanding as of December 30, 2015
2,574,981

 
$
21.00

 
 
 
 
 
Granted
16,931

 
34.74

 
 
 
 
 
Exercised
(160,230
)
 
21.00

 
 
 
 
 
Forfeited
(66,960
)
 
(21.00
)
 
 
 
 
 
Expired
—

 
—

 
 
 
 
Outstanding as of December 28, 2016
2,364,722

 
$
21.10

 
 
 
 
 
Granted
5,150

 
38.91

 
 
 
 
 
Exercised
(359,011
)
 
21.13

 
 
 
 
 
Forfeited
(291,520
)
 
(21.00
)
 
 
 
 
 
Expired
—

 
—

 
 
 
 
Outstanding as of December 27, 2017
1,719,341

 
$
21.16

 
$
39,851

 
7.1
Options vested and exercisable as of December 27, 2017
543,246

 
$
21.34

 
$
12,493

 
7.1
Options expected to vest as of December 27, 2017
1,098,577

 
$
21.08

 
$
25,549

 
7.1

As of December 27, 2017, total unrecognized compensation expense related to unvested stock options was $7,098, which is expected to be recognized over a weighted-average period of 2.1 years. The total intrinsic value of stock options exercised during fiscal 2017 and 2016 was $8,333 and $2,536, respectively. No stock options were exercised during fiscal 2015. Cash received from stock option exercises was $7,585 for fiscal 2017.
A summary of unvested stock option activity for fiscal years 2017, 2016 and 2015 is as follows:
 
 
Stock
Options

 
Weighted
Average
Grant-Date Fair Value

Unvested as of December 31, 2014
—

 
$
—

 
Vested
—

 
—

 
Granted
2,622,281

 
8.53

 
Forfeited
(47,300
)
 
8.59

Unvested as of December 30, 2015
2,574,981

 
$
8.53

 
Vested
(562,296
)
 
8.32

 
Granted
16,931

 
16.32

 
Forfeited
(65,365
)
 
8.59

Unvested as of December 28, 2016
1,964,251

 
$
8.66

 
Vested
(503,686
)
 
8.85

 
Granted
5,150

 
19.42

 
Forfeited
(289,620
)
 
8.59

Unvested as of December 27, 2017
1,176,095

 
$
8.64


The total fair value of stock options vested during fiscal 2017 and 2016 was $4,458 and $4,678, respectively. No stock options vested during fiscal 2015.
The following table summarizes information about stock options outstanding and exercisable as December 27, 2017:
 
 
Options Outstanding
 
 
Options Exercisable
 
 
 
Number Outstanding at December 27, 2017

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

 
Number Exercisable at December 27, 2017

 
Weighted Average Remaining Contractual Life (Years)

 
Weighted Average Exercise Price

Exercise Price
 
 
 
 
 
 
$21.00
 
1,700,665

 
7.1
 
$
21.00

 
529,720

 
7.1

 
$
21.00

$34.62
 
12,418

 
8.4
 
$
34.62

 
12,418

 
8.4

 
$
34.62

$36.41
 
1,108

 
8.9
 
$
36.41

 
1,108

 
8.9

 
$
36.41

$38.91
 
5,150

 
9.5
 
$
38.91

 
—

 
—

 
$
—


Performance Stock Units
Under the 2015 Plan, we may grant performance stock units and other types of performance-based equity awards that vest based on the outcome of certain performance criteria that are established and approved by the Compensation Committee of the Board of Directors. The actual number of equity awards earned is based on the level of performance achieved over a predetermined performance period, relative to established financial goals, none of which are considered market conditions.
For performance stock units granted during fiscal 2017, the amount of awards that can be earned range from 0% to 125% of the number of performance stock units granted, based on the achievement of approved financial goals over a one-year performance period. In addition to the performance conditions, performance stock units are also subject to a requisite service period and the awards will vest ratably over three years. The fair value of performance stock units is determined based on the closing market price of our Class A common stock on the date of grant. Compensation expense related to the performance stock units is recognized using a graded-vesting attribution method over the vesting period based on the most probable outcome of the performance conditions.
A summary of performance stock unit activity for fiscal years 2017 and 2016 is as follows:
 
 
Performance
Stock
Units

 
Weighted
Average
Grant Date Fair Value

Outstanding as of December 30, 2015
—

 
$
—

 
Granted
63,600

 
38.41

 
Performance achievement(1)
—

 
—

 
Vested
—

 
—

 
Forfeited
(2,000
)
 
38.43

 
Expired
—

 
—

Outstanding as of December 28, 2016
61,600

 
$
38.41

 
Granted
87,596

 
37.90

 
Performance achievement(1)
9,545

 
38.40

 
Vested
(22,703
)
 
38.40

 
Forfeited
(11,196
)
 
38.28

 
Expired
—

 
—

Outstanding as of December 27, 2017
124,842

 
$
38.06


(1)
Represents incremental awards earned based on the achievement of performance conditions.

No performance stock units were granted in fiscal 2015. As of December 27, 2017, there were 124,842 performance stock units outstanding, of which none were vested. As of December 27, 2017, total unrecognized compensation expense related to unvested performance stock units was $2,385, which is expected to be recognized over a weighted-average period of 1.6 years.
Restricted Stock Units
Under the 2015 Plan, we may grant restricted stock units to employees, directors and officers. The restricted stock units granted generally vest equally over periods ranging from one to five years. The fair value of restricted stock units is determined based on the closing market price of our Class A common stock on the date of grant. Compensation expense related to the restricted stock units is recognized using a straight-line attribution method over the vesting period.
In fiscal 2017, 44,476 restricted stock units were granted with a weighted average grant date fair value of $38.98. As of December 27, 2017, there were 44,476 restricted stock units outstanding, of which none were vested. No restricted stock units were granted in fiscal 2016 and 2015. As of December 27, 2017, total unrecognized compensation expense related to unvested restricted stock units was $1,453, which is expected to be recognized over a weighted-average period of 2.5 years.
INCOME TAXES
INCOME TAXES
INCOME TAXES
 
We are the sole managing member of SSE Holdings, and as a result, consolidate the financial results of SSE Holdings. SSE Holdings is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, SSE Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by SSE Holdings is passed through to and included in the taxable income or loss of its members, including us, on a pro rata basis. We are subject to U.S. federal income taxes, in addition to state and local income taxes with respect to our allocable share of any taxable income or loss of SSE Holdings, as well as any stand-alone income or loss generated by Shake Shack Inc. We are also subject to withholding taxes in foreign jurisdictions.
In December 2017, the Tax Cuts and Jobs Act of 2017 (the "TCJA") was enacted into law. The TCJA provides for significant changes to the U.S. Internal Revenue Code of 1986, as amended, including the reduction of the U.S. federal corporate income tax rate from 35% to 21%, among other provisions. We have calculated our best estimate of the impact of the TCJA based on current interpretations and understanding of the TCJA and recognized an additional $138,636 of income tax expense as a provisional amount, in accordance with Staff Accounting Bulletin No. 118 ("SAB 118"), relating to the remeasurement of our deferred tax assets. Any subsequent adjustment to these provisional amounts as a result of obtaining, preparing, or analyzing additional information about facts and circumstances that existed as of the enactment date will be recognized as income tax expense in fiscal 2018.
Income Tax Expense
The components of income before income taxes are follows:
 
2017

 
2016

 
2015

Domestic
$
152,204

 
$
20,623

 
$
244

Foreign
8,089

 
7,873

 
6,184

Income before income taxes
$
160,293

 
$
28,496

 
$
6,428


The components of income tax expense are as follows:
 
 
 
2017

 
2016

 
2015

Current income taxes:
 
 
 
 
 
 
Federal
$
518

 
$
3,767

 
$
2,474

 
State and local
3,615

 
2,439

 
1,131

 
Foreign
942

 
667

 
433

 
Total current income taxes
5,075

 
6,873

 
4,038

Deferred income taxes:
 
 
 
 
 
 
Federal
145,139

 
(48
)
 
(267
)
 
State and local
1,195

 
(475
)
 
(467
)
 
Total deferred income taxes
146,334

 
(523
)
 
(734
)
Income tax expense
$
151,409

 
$
6,350

 
$
3,304


Reconciliations of income tax expense computed at the U.S. federal statutory income tax rate to the recognized income tax expense and the U.S. statutory income tax rate to our effective tax rates are as follows:
 
 
2017
 
 
2016
 
 
2015
 
Expected U.S. federal income taxes at statutory rate
$
56,103

35.0
 %
 
$
9,689

34.0
 %
 
$
2,186

34.0
 %
State and local income taxes, net of federal benefit
2,590

1.6
 %
 
1,461

5.1
 %
 
663

10.3
 %
Foreign withholding taxes
942

0.6
 %
 
667

2.3
 %
 
433

6.7
 %
Non-deductible expenses
223

0.1
 %
 
25

0.1
 %
 
653

10.2
 %
Tax credits
(1,230
)
(0.8
)%
 
(779
)
(2.7
)%
 
(141
)
(2.2
)%
Non-controlling interest
(3,273
)
(2.0
)%
 
(3,765
)
(13.2
)%
 
(490
)
(7.6
)%
Remeasurement of deferred tax assets in connection with the enactment of the TCJA
138,636

86.5
 %
 
—

—
 %
 
—

—
 %
Remeasurement of deferred tax assets in connection with other tax rate changes
1,657

1.0
 %
 
(1,353
)
(4.7
)%
 
—

—
 %
Remeasurement of liabilities under tax receivable agreement in connection with the enactment of the TCJA
(44,051
)
(27.4
)%
 
—

—
 %
 
—

—
 %
Other
(188
)
(0.1
)%
 
405

1.4
 %
 
—

—
 %
Income tax expense
$
151,409

94.5
 %
 
$
6,350

22.3
 %
 
$
3,304

51.4
 %


Our effective income tax rates for fiscal 2017, 2016 and 2015 were 94.5%, 22.3% and 51.4%, respectively. The increase in our effective income tax rate from fiscal 2016 to fiscal 2017 is primarily due to the remeasurement of deferred tax assets resulting from the enactment of the TCJA. The decrease in our effective income tax rate from fiscal 2015 to fiscal 2016 is due to the IPO and Organizational Transactions that occurred in fiscal 2015. As the non-recurring compensation expenses and other IPO-related expenses recognized during fiscal 2015 were incurred in the period prior to the Organizational Transactions, and prior to our becoming a member of SSE Holdings, we were not entitled to any tax benefits related to those losses. We recognized tax expense in fiscal 2015 based on our allocable share of the taxable income generated in the period subsequent to our becoming a member of SSE Holdings, which resulted in a very high effective tax rate in fiscal 2015 when compared to our consolidated pre-tax income. Additionally, in fiscal 2016, the effective tax rate was positively impacted by a tax benefit of $1,353 we recognized due to the impact from a tax rate change on our deferred tax assets, as well as other rate changes.
Deferred Tax Assets and Liabilities
The components of deferred tax assets and liabilities are as follows:
 
 
 
December 27
2017

 
December 28
2016

Deferred tax assets:
 
 
 
 
Investment in partnership
$
137,449

 
$
209,648

 
Tax Receivable Agreement
43,464

 
110,022

 
Deferred rent
571

 
561

 
Deferred revenue
59

 
53

 
Stock-based compensation
322

 
331

 
Net operating loss carryforwards
12,332

 
7,338

 
Tax credits
2,328

 
1,084

 
Other assets
176

 
108

 
Total gross deferred tax assets
196,701

 
329,145

Valuation allowance
(10,114
)
 
(15,568
)
Total deferred tax assets, net of valuation allowance
186,587

 
313,577

Deferred tax liabilities:
 
 
 
 
Property and equipment
(673
)
 
(370
)
 
Total gross deferred tax liabilities
(673
)
 
(370
)
Net deferred tax assets
$
185,914

 
$
313,207


As of December 27, 2017, our federal and state net operating loss carryforwards for income tax purposes were $51,668 and $19,166. If not utilized, our federal and state net operating loss carryforwards will begin to expire in 2035.
As described in Note 11, we acquired an aggregate of 1,376,093 LLC Interests during fiscal 2017 through redemptions of LLC Interests and the exercise of employee stock options. We recognized a deferred tax asset in the amount of $14,370 associated with the basis difference in our investment in SSE Holdings upon acquiring these LLC Interests. These were partially offset by reductions in basis due to the utilization of $14,339 of amortization. However, a portion of the total basis difference will only reverse upon the eventual sale of our interest in SSE Holdings, which we expect would result in a capital loss. As of December 27, 2017, we established a valuation allowance in the amount of $10,114 against the deferred tax asset to which this portion relates.
During fiscal 2017, we also recognized $7,661 of deferred tax assets related to additional tax basis increases generated from expected future payments under the Tax Receivable Agreement and related deductions for imputed interest on such payments. See "—Tax Receivable Agreement" for more information.
We evaluate the realizability of our deferred tax assets on a quarterly basis and establish valuation allowances when it is more likely than not that all or a portion of a deferred tax asset may not be realized. As of December 27, 2017, we concluded, based on the weight of all available positive and negative evidence, that all of our deferred tax assets (except for those deferred tax assets described above relating to basis differences that are expected to result in a capital loss upon the eventual sale of our interest in SSE Holdings) are more likely than not to be realized. As such, no additional valuation allowance was recognized. The net change in valuation allowance for fiscal 2017 was a decrease of $5,454.
Uncertain Tax Positions
There were no reserves for uncertain tax positions as of December 27, 2017 and December 28, 2016. Shake Shack Inc. was formed in September 2014 and did not engage in any operations prior to the IPO and Organizational Transactions. Shake Shack Inc. first filed tax returns for tax year 2014, which is the first tax year subject to examination by taxing authorities for U.S. federal and state income tax purposes. Additionally, although SSE Holdings is treated as a partnership for U.S. federal and state income taxes purposes, it is still required to file an annual U.S. Return of Partnership Income, which is subject to examination by the Internal Revenue Service ("IRS"). The statute of limitations has expired for tax years through 2013 for SSE Holdings.
Tax Receivable Agreement
Pursuant to our election under Section 754 of the Internal Revenue Code (the "Code"), we expect to obtain an increase in our share of the tax basis in the net assets of SSE Holdings when LLC Interests are redeemed or exchanged by the non-controlling interest holders and other qualifying transactions. We plan to make an election under Section 754 of Code for each taxable year in which a redemption or exchange of LLC Interest occurs. We intend to treat any redemptions and exchanges of LLC Interests by the non-controlling interest holders as direct purchases of LLC Interests for U.S. federal income tax purposes. These increases in tax basis may reduce the amounts that we would otherwise pay in the future to various tax authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.
On February 4, 2015, we entered into a tax receivable agreement with the then-existing non-controlling interest holders (the "Tax Receivable Agreement") that provides for the payment by us to the non-controlling interest holders of 85% of the amount of any tax benefits that we actually realize, or in some cases are deemed to realize, as a result of (i) increases in our share of the tax basis in the net assets of SSE Holdings resulting from any redemptions or exchanges of LLC Interests, (ii) tax basis increases attributable to payments made under the Tax Receivable Agreement, and (iii) deductions attributable to imputed interest pursuant to the Tax Receivable Agreement (the "TRA Payments"). We expect to benefit from the remaining 15% of any tax benefits that we may actually realize. The TRA Payments are not conditioned upon any continued ownership interest in SSE Holdings or us. The rights of each non-controlling interest holder under the Tax Receivable Agreement are assignable to transferees of its LLC Interests.
During fiscal 2017, we acquired an aggregate of 1,003,585 LLC Interests in connection with the redemption of LLC Interests, which resulted in an increase in the tax basis of our investment in SSE Holdings subject to the provisions of the Tax Receivable Agreement. We recognized an additional liability in the amount of $18,973 for the TRA Payments due to the redeeming members, representing 85% of the aggregate tax benefits we expect to realize from the tax basis increases related to the redemption of LLC Interests, after concluding it was probable that such TRA Payments would be paid based on our estimates of future taxable income. Also, we recognized $125,859 benefit in other income related to the reduction in liabilities under its Tax Receivable Agreement related to the enactment of the TCJA. During fiscal 2017 payments of $4,910, inclusive of interest, were made to members of SSE Holdings pursuant to the Tax Receivable Agreement. As of December 27, 2017, the total amount of TRA Payments due under the Tax Receivable Agreement was $159,373, of which $937 was included in other current liabilities on the Consolidated Balance Sheet. See Note 17 for more information relating to our liabilities under the Tax Receivable Agreement.
EARNINGS PER SHARE
EARNINGS PER SHARE
EARNINGS PER SHARE
 
Basic earnings per share of Class A common stock is computed by dividing net income attributable 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 attributable to Shake Shack Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities.

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock for fiscal 2017, 2016 and 2015.
 
 
 
2017

 
2016

 
2015

Numerator:
 
 
 
 
 
 
Net income
$
8,884

 
$
22,146

 
$
3,124

 
Less: net income attributable to non-controlling interests
9,204

 
9,700

 
11,900

 
Net income (loss) attributable to Shake Shack Inc.
$
(320
)
 
$
12,446

 
$
(8,776
)
Denominator:
 
 
 
 
 
 
Weighted-average shares of Class A common stock outstanding—basic
25,876

 
22,956

 
13,588

 
Effect of dilutive securities:
 
 
 
 
 
 
 
Stock options
—

 
493

 
—

 
Weighted-average shares of Class A common stock outstanding—diluted
25,876

 
23,449

 
13,588

 
 
 
 
 
 
 
 
Earnings (loss) per share of Class A common stock—basic
$
(0.01
)
 
$
0.54

 
$
(0.65
)
Earnings (loss) per share of Class A common stock—diluted
$
(0.01
)
 
$
0.53

 
$
(0.65
)

Shares of our Class B common stock do not share in the earnings or losses of Shake Shack and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented.
The following table presents potentially dilutive securities excluded from the computations of diluted earnings per share of Class A common stock for fiscal 2017, 2016 and 2015.
 
 
 
2017
 
2016
 
2015
Stock options(1)
1,719,341

(3)
 
125

(2)
 
2,574,981

(3)
Performance stock units(1)
124,842

(3)
 
26,860

(4)
 
—

 
Restricted stock units(1)
44,476

(3)
 
—

 
 
—

 
Shares of Class B common stock
10,250,007

(5)
 
11,253,592

(5)
 
16,460,741

(5)

(1)
Represents the number of instruments outstanding at the end of the period. Application of the treasury stock method would reduce this amount if they had a dilutive effect and were included in the computation of diluted earnings per share.
(2)
Excluded from the computation of diluted earnings per share of Class A common stock because the exercise price of the stock options exceeded the average market price of our Class A common stock during the period ("out-of-the-money").
(3)
Excluded from the computation of diluted earnings per share of Class A common stock because the effect would have been anti-dilutive.
(4)
Weighted-average number of securities excluded from the computation of diluted earnings per share of Class A common stock because the performance conditions were not met for a portion of the fiscal year.
(5)
Shares of our Class B common stock are considered potentially dilutive shares of Class A common stock. Amounts have been excluded from the computations of diluted earnings per share of Class A common stock because the effect would have been anti-dilutive under the if-converted and two-class methods.
SUPPLEMENTAL CASH FLOW INFORMATION
SUPPLEMENTAL CASH FLOW INFORMATION
SUPPLEMENTAL CASH FLOW INFORMATION
 
The following table sets forth supplemental cash flow information for fiscal 2017, 2016 and 2015:
 
 
2017

 
2016

 
2015

Cash paid for:
 
 
 
 
 
 
Income taxes, net of refunds
$
2,261

 
$
1,823

 
$
416

 
Interest, net of amounts capitalized
1,106

 
54

 
92

Non-cash investing activities:
 
 
 
 
 
 
Accrued purchases of property and equipment
7,526

 
6,150

 
4,904

 
Capitalized landlord assets for leases where we are deemed the accounting owner
10,125

 
1,985

 
—

 
Capitalized equity-based compensation
109

 
139

 
—

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

 
—

 
6

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

 
—

 
2

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

 
—

 
(6
)
 
Class A common stock issued in connection with the redemption of LLC Interests
1

 
5

 
6

 
Cancellation of Class B common stock in connection with the redemption of LLC Interests
(1
)
 
(5
)
 
(6
)
 
Cancellation of Class B common stock in connection with the USC Merger
—

 
—

 
(2
)
 
Establishment of liabilities under tax receivable agreement
18,973

 
100,063

 
173,090

 
Accrued distributions payable to non-controlling interest holders
—

 
607

 
—

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 2035. Under certain of these leases, we are liable for contingent rent based on a percentage of sales in excess of specified thresholds and are responsible for our proportionate share of real estate taxes, common area maintenance charges and utilities. See Note 9, Leases.
As security under the terms of several of our leases, we are obligated under letters of credit totaling $160 as of December 27, 2017. The letters of credit expire on April 23, 2018 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 2018 and renews automatically for one-year periods through September 30, 2019. In September 2017, we entered into an irrevocable standby letter of credit in conjunction with our new home office lease in the amount of $603. The letter of credit expires in August 2018 and renews automatically for one-year periods through January 31, 2034.
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 generally not subject to any time limit and there are no material financial penalties associated with these agreements in the event of early termination.
Legal Contingencies
In November 2015, we participated in a voluntary mediation with counsel representing two former Shake Shack managers, who alleged that we improperly classified our restaurant managers as exempt from overtime protections. At the conclusion of the mediation, the parties mutually agreed to fully and finally resolve the matter by settling, rather than litigating. In connection with the settlement, the parties entered into a memorandum of understanding, pursuant to which we agreed to create a settlement fund in the amount of $750 and, in exchange for their participation in the settlement fund, all participating employees (current and former) were required to release Shake Shack from all federal and/or state wage and hour claims that may exist through the settlement date. On March 11, 2016, as required by the memorandum of understanding, the parties entered into a settlement agreement in the amount of $750. To facilitate the resolution of the matter, the parties coordinated the filing by the plaintiff's counsel of a Complaint on March 17, 2016 with the Supreme Court of the State of New York (the “Court”). On October 25, 2016, the Court granted preliminary approval of the settlement agreement. On December 13, 2016, all eligible class members were mailed the notice of settlement, and the deadline to opt-out or object was January 27, 2017. On March 7, 2017, the Court held a fairness hearing, at which time it determined that the settlement agreement was fair, adequate and equitable, and subsequently issued its order granting final approval of the settlement. On May 1, 2017, we paid to the claims administrator $774 in full satisfaction of the amounts owed by us under the settlement agreement and related expenses.

We are subject to various legal proceedings, claims and liabilities, such as employment-related claims and slip and fall cases, which arise in the ordinary course of business and are generally covered by insurance. As of December 27, 2017, the amount of ultimate liability with respect to these matters was not material.
Liabilities under Tax Receivable Agreement
As described in Note 14, we are a party to the Tax Receivable Agreement under which we are contractually committed to pay the non-controlling interest holders 85% of the amount of any tax benefits that we actually realize, or in some cases are deemed to realize, as a result of certain transactions. We are not obligated to make any payments under the Tax Receivable Agreement until the tax benefits associated the transaction that gave rise to the payment are realized. Amounts payable under the Tax Receivable Agreement are contingent upon, among other things, (i) generation of future taxable income over the term of the Tax Receivable Agreement and (ii) future changes in tax laws. If we do not generate sufficient taxable income in the aggregate over the term of the Tax Receivable Agreement to utilize the tax benefits, then we would not be required to make the related TRA Payments. As of December 27, 2017, we recognized $159,373 of liabilities relating to our obligations under the Tax Receivable Agreement, after concluding that it was probable that we would have sufficient future taxable income to utilize the related tax benefits. There were no transactions subject to the Tax Receivable Agreement for which we did not recognize the related liability, as we concluded that we would have sufficient future taxable income to utilize all of the related tax benefits generated by all transactions that occurred in fiscal 2017.
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS
 
Union Square Hospitality Group
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 are considered related parties.
USHG, LLC
Effective January 2015, we entered into an Amended and Restated Management Services Agreement with USHG, LLC ("USHG"), which USHG provides reduced management services to SSE Holdings comprised of executive leadership from members of its senior management, advisory and development services and limited leadership development and human resources services. The initial term of the Amended and Restated Management Services Agreement is through December 31, 2019, with renewal periods.
Total amounts paid to USHG for general corporate expenses were $7, $10 and $157 for fiscal 2017, 2016 and 2015, respectively, and are included in general and administrative expenses on the Consolidated Statements of Income (Loss).
Previously, our employees were included in USHG's self-insurance health plan and we paid our portion of the plan costs on a monthly basis to USHG. In February 2015, we established our own self-funded health insurance plan for our employees and ceased payments to USHG. Amounts paid to USHG for these health insurance costs were $146 for fiscal 2015. No amounts were paid to USHG for these health insurance costs for fiscal 2017 and 2016. This amount is included in labor and related expenses and general and administrative expenses on the Consolidated Statements of Income (Loss). Additionally, our employees are eligible participants under USHG's 401(k) plan. We pay our share of the employer's matching contributions directly to the third-party plan trustee.
No amounts were payable to USHG as of December 27, 2017. Total amounts payable to USHG as of December 28, 2016 were $1, which is included in other current liabilities on the Consolidated Balance Sheets. No amounts were due from USHG as of December 27, 2017 and December 28, 2016.
Daily Provisions
For a period of time in fiscal 2017, we purchased coffee cake from the restaurant Daily Provisions to offer as a breakfast item at our Madison Square Park Shack. Amounts paid to Daily Provisions for fiscal 2017 were $6. No amounts were payable to Daily Provisions as of December 27, 2017 and December 28, 2016.
Hudson Yards Sports and Entertainment
In fiscal 2011, we entered into a Master License Agreement (as amended, an "MLA") with Hudson Yards Sports and Entertainment LLC ("HYSE") to operate Shake Shack branded limited menu concession stands in sports and entertainment venues within the United States. The agreement expires on December 31, 2027 and includes five consecutive five-year renewal options at HYSE's option. As consideration for these rights, HYSE pays us a license fee based on a percentage of net food sales, as defined in the MLA. HYSE also pays us a percentage of profits on sales of branded beverages, as defined in the MLA. Amounts paid to us by HYSE for fiscal 2017, 2016 and 2015 were $452, $309 and $282, respectively, and are included in licensing revenue on the Consolidated Statements of Income (Loss). Total amounts due from HYSE as of December 27, 2017 and December 28, 2016 were $18 and $11, respectively, which are included in prepaid expenses and other current assets on the Consolidated Balance Sheets.
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 $907, $1,062 and $692 for fiscal 2017, 2016 and 2015, respectively. These amounts are included in occupancy and related expenses on the Consolidated Statements of Income (Loss). No amounts were due to MSP Conservancy as of December 27, 2017. Total amounts due to MSP Conservancy were were $1 as of December 28, 2016, which is included in accrued expenses on the Consolidated Balance Sheets.
Additionally, we received tenant improvement allowances from MSP Conservancy related to a reconstruction project which ended in 2015. Amounts paid to us from MSP Conservancy for fiscal 2017 were $200. No amounts were paid to us by MSP Conservancy in fiscal 2016 and 2015. No amounts were due to us from MSP Conservancy as of December 27, 2017. Total amounts due from MSP Conservancy as of December 28, 2016 were $200, which is included in account receivable on the Consolidated Balance Sheets.
Share Our Strength
The Chairman of our Board of Directors serves as a director of Share Our Strength, for which Shake Shack holds the "Great American Shake Sale" every year during the month of May to raise money and awareness for childhood hunger. During the Great American Shake Sale, we encourage guests to donate money to Share Our Strength's No Kid Hungry campaign in exchange for a coupon for a free cake-themed shake. All of the guest donations we collect go directly to Share Our Strength. We raised a total of $633, $587 and $504 in fiscal 2017, 2016 and 2015, respectively, and the proceeds were remitted to Share Our Strength in the respective years. We incurred costs of approximately $148, $117 and $109 for fiscal 2017, 2016 and 2015, respectively, representing the cost of the free shakes redeemed. These costs are included in general and administrative expenses and other operating expenses on the Consolidated Statements of Income (Loss). Additionally, we held a promotional event in August 2016 in which we donated a total of $20 to the Share Our Strength's No Kid Hungry campaign, which is included in general and administrative expenses on the Consolidated Statements of Income (Loss).
Mobo Systems, Inc.
The Chairman of our Board of Directors serves as a director of Mobo Systems, Inc. (also known as "Olo"), a platform we use in connection with our mobile ordering application. Amounts paid to Olo for fiscal 2017 and 2015 were $80 and $8, respectively, which are included in other operating expenses on the Consolidated Statements of Income (Loss). No amounts were paid to Olo for fiscal 2016. No amounts were payable to Olo as of December 27, 2017 and December 28, 2016.
Square, Inc.
In July 2017, our Chief Executive Officer joined the Board of Directors of Square, Inc. ("Square"). We currently use certain point-of-sale applications, payment processing services, hardware and other enterprise platform services in connection with the processing of a limited amount of sales at certain of our Shacks, sales for certain off-site events and in connection with our kiosk technology. Additionally, in March 2017 and October 2017, we partnered with Caviar, Square's food ordering service, for a limited-time delivery promotion. Amounts paid to Square for fiscal 2017 were $33 which are included in other operating expenses on the Consolidated Statements of Income (Loss). No amounts were payable to Square as of December 27, 2017 and December 28, 2016.
Tax Receivable Agreement
In connection with our IPO, we entered into a Tax Receivable Agreement with certain non-controlling interest holders that provides for the payment by us to the non-controlling holders of 85% of the amount of any tax benefits that Shake Shack actually realizes or in some cases is deemed to realize as a result of (i) increases in the tax basis of the net assets of SSE Holdings resulting from any redemptions or exchanges of LLC Interests and (ii) certain other tax benefits related to our making payments under the Tax Receivable Agreement. See Note 14 for further information. In fiscal 2017, payments of $4,910, inclusive of interest, were made to the non-controlling interest holders. There were no amounts paid under the Tax Receivable Agreement to the non-controlling interest holders during fiscal 2016 and 2015. As of December 27, 2017 and December 28, 2016, total amounts due under the Tax Receivable Agreement were $159,373 and $272,482, respectively.
Distributions to Members of SSE Holdings
Under the terms of the SSE Holdings LLC Agreement, SSE Holdings is obligated to make tax distributions to its members. During fiscal 2017 and 2016 tax distributions of $2,379 and $1,745, respectively, were paid to non-controlling interest holders. A special distribution was paid to certain members of SSE Holdings in the amount of $11,125 on February 4, 2015. No tax distributions were paid to non-controlling interest holders during fiscal 2015. No tax distributions were payable to non-controlling interest holders as of December 27, 2017. As of December 28, 2016, $607 was payable to non-controlling interest holders.
GEOGRAPHIC INFORMATION
GEOGRAPHIC INFORMATION
GEOGRAPHIC INFORMATION
 
Revenue by geographic area for fiscal 2017, 2016 and 2015 is as follows:
 
 
2017

 
2016

 
2015

United States
$
348,575

 
$
260,602

 
$
184,408

Other countries
10,235

 
7,873

 
6,184

Total revenue
$
358,810

 
$
268,475

 
$
190,592


Revenues are shown based on the geographic location of our customers and licensees. All of our assets are located in the United States.
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
 
The following table sets forth certain unaudited financial information for each quarter of fiscal 2017 and 2016. The unaudited quarterly information includes all adjustments (consisting of normal recurring adjustments) that, in the opinion of management, are necessary for the fair presentation of the information presented. Operating results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year.
 
 
 
2017
 
 
 
 
First

 
Second

 
Third

 
Fourth

 
 
 
Quarter

 
Quarter

 
Quarter

 
Quarter

Total revenue
$
76,749

 
$
91,316

 
$
94,609

 
$
96,136

Operating income
5,628

 
11,737

 
10,610

 
5,838

Net income (loss)
3,862

 
8,184

 
7,870

 
(11,032
)
Net income (loss) attributable to Shake Shack Inc.
2,267

 
4,879

 
4,997

 
(12,463
)
Earnings (loss) per share(1):
 
 
 
 
 
 
 
 
Basic
$
0.09

 
$
0.19

 
$
0.19

 
$
(0.47
)
 
Diluted
$
0.09

 
$
0.19

 
$
0.19

 
$
(0.47
)

 
 
 
2016
 
 
 
 
First

 
Second

 
Third

 
Fourth

 
 
 
Quarter

 
Quarter

 
Quarter

 
Quarter

Total revenue
$
54,165

 
$
66,472

 
$
74,567

 
$
73,271

Operating income
4,714

 
8,933

 
9,170

 
4,988

Net income
3,351

 
6,549

 
6,789

 
5,457

Net income attributable to Shake Shack Inc.
1,462

 
3,298

 
3,766

 
3,920

Earnings per share(1):
 
 
 
 
 
 
 
 
Basic
$
0.07

 
$
0.15

 
$
0.16

 
$
0.16

 
Diluted
$
0.07

 
$
0.14

 
$
0.15

 
$
0.15

(1)
Basic and diluted earnings per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted earnings per share amounts may not equal annual basic and diluted earnings per share amounts.
SCHEDULE I: CONDENSED FINANCIAL INFORMATION OF REGISTRANT
SCHEDULE I: CONDENSED FINANCIAL INFORMATION OF REGISTRANT
SHAKE SHACK INC.
CONDENSED BALANCE SHEETS
(PARENT COMPANY ONLY)
(in thousands, except share and per share amounts)
 
 
 
December 27
2017

 
December 28
2016

ASSETS
 
 
 
Current assets:
 
 
 
 
Cash
$
4,988

 
$
3,785

 
Accounts receivable
—

 
2

 
Prepaid expenses
100

 
105

 
Total current assets
5,088

 
3,892

Deferred income taxes, net
185,750

 
312,802

Investment in subsidiaries
142,314

 
109,680

TOTAL ASSETS
$
333,152

 
$
426,374

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
 
Accrued expenses
70

 
49

 
Due to SSE Holdings
4,217

 
1,655

 
Current portion of liabilities under tax receivable agreement
937

 
4,580

 
Total current liabilities
5,224

 
6,284

Liabilities under tax receivable agreement, net of current portion
158,436

 
267,902

Total liabilities
163,660

 
274,186

Commitments and contingencies

 

Stockholders' equity:
 
 
 
 
Preferred stock, no par value—10,000,000 shares authorized; none issued and outstanding as of December 27, 2017 and December 28, 2016, respectively.
—

 
—

 
Class A common stock, $0.001 par value—200,000,000 shares authorized; 26,527,477 and 25,151,384 shares issued and outstanding as of December 27, 2017 and December 28, 2016, respectively.
27

 
25

 
Class B common stock, $0.001 par value—35,000,000 shares authorized; 10,250,007 and 11,253,592 shares issued and outstanding as of December 27, 2017 and December 28, 2016, respectively.
10

 
11

 
Additional paid-in capital
153,105

 
135,448

 
Retained earnings
16,399

 
16,719

 
Accumulated other comprehensive loss
(49
)
 
(15
)
 
Total stockholders' equity
169,492

 
152,188

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
333,152

 
$
426,374

See accompanying Notes to Condensed Financial Statements.
SHAKE SHACK INC.
CONDENSED STATEMENTS OF INCOME (LOSS)
(PARENT COMPANY ONLY)
(in thousands)
 
 
 
Fiscal Year Ended
 
 
 
 
December 27
2017

 
December 28
2016

 
December 30
2015

Intercompany revenue
$
1,466

 
$
1,603

 
$
1,336

TOTAL REVENUE
1,466

 
1,603

 
1,336

General and administrative expenses
1,692

 
1,603

 
1,336

TOTAL EXPENSES
1,692

 
1,603

 
1,336

OPERATING LOSS
(226
)
 
—

 
—

Equity in net income of subsidiaries
22,090

 
16,982

 
6,906

Other income
127,221

 
688

 
—

Interest expense
(50
)
 
(16
)
 
—

INCOME BEFORE INCOME TAXES
149,035

 
17,654

 
6,906

Income tax expense
149,355

 
5,208

 
2,633

NET INCOME (LOSS)
$
(320
)
 
$
12,446

 
$
4,273

See accompanying Notes to Condensed Financial Statements.
SHAKE SHACK INC.
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(PARENT COMPANY ONLY)
(in thousands)
 
 
 
Fiscal Year Ended
 
 
 
 
December 27
2017

 
December 28
2016

 
December 30
2015

Net income (loss)
$
(320
)
 
$
12,446

 
$
4,273

Other comprehensive (loss), net of tax:
 
 
 
 
 
 
Available-for-sale securities(1):
 
 
 
 
 
 
 
Change in net unrealized holding (losses)
(67
)
 
(22
)
 
(5
)
 
 
Less: reclassification adjustments for net realized losses included in net income
33

 
12

 
—

 
 
Net change
(34
)
 
(10
)
 
(5
)
OTHER COMPREHENSIVE LOSS
(34
)
 
(10
)
 
(5
)
COMPREHENSIVE INCOME (LOSS)
$
(354
)
 
$
12,436

 
$
4,268

(1) Net of tax benefit of $0 for fiscal years ended December 27, 2017, December 28, 2016 and December 30, 2015.
See accompanying Notes to Condensed Financial Statements.
SHAKE SHACK INC.
CONDENSED STATEMENTS OF CASH FLOWS
(PARENT COMPANY ONLY)
(in thousands)
 
 
 
 
 
 
Fiscal Year Ended
 
 
 
 
 
 
 
December 27
2017

 
December 28
2016

 
December 30
2015

OPERATING ACTIVITIES
 
 
 
 
 
Net income (loss)
$
(320
)
 
$
12,446

 
$
4,273

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
 
 
 
 
 
 
Equity in net income of subsidiaries
(22,090
)
 
(16,982
)
 
(6,906
)
 
Equity-based compensation
234

 
189

 
330

 
Non-cash reimbursement revenue treated as investment
—

 
(189
)
 
—

 
Deferred income taxes
146,095

 
(462
)
 
(551
)
 
Other non-cash income
(127,221
)
 
(688
)
 
—

 
Changes in operating assets and liabilities:
 
 
 
 
 
 
 
Accounts receivable
2

 
(2
)
 
—

 
 
Prepaid expenses and other current assets
5

 
(1
)
 
—

 
 
Due to/from SSE Holdings
(5,339
)
 
214

 
4

 
 
Accrued expenses
21

 
(11
)
 
58

 
 
Other current liabilities
(17
)
 
17

 
—

 
 
Income taxes payable
2,990

 
5,023

 
3,184

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
(5,640
)
 
(446
)
 
392

INVESTING ACTIVITIES
 
 
 
 
 
Purchases of LLC Interests from SSE Holdings
(5,522
)
 
(4,559
)
 
(112,298
)
Return of investment in SSE Holdings
4,101

 
2,694

 
—

NET CASH USED IN INVESTING ACTIVITIES
(1,421
)
 
(1,865
)
 
(112,298
)
FINANCING ACTIVITIES
 
 
 
 
 
Proceeds from issuance of Class A common stock sold in initial public offering, net of underwriting discounts and commissions
—

 
—

 
112,298

Proceeds from issuance of Class A common stock to SSE Holdings upon settlement of stock option exercises
5,522

 
2,489

 
—

Proceeds from issuance of Class B common stock
—

 
—

 
30

Proceeds from stock option exercises
7,586

 
3,185

 
—

Payments under tax receivable agreement
(4,844
)
 
—

 
—

NET CASH PROVIDED BY FINANCING ACTIVITIES
8,264

 
5,674

 
112,328

INCREASE IN CASH
1,203

 
3,363

 
422

CASH AT BEGINNING OF PERIOD
3,785

 
422

 
—

CASH AT END OF PERIOD
$
4,988

 
$
3,785

 
$
422


See accompanying Notes to Condensed Financial Statements.
NOTE 1: ORGANIZATION
Shake Shack Inc. (the "Parent Company") was formed on September 23, 2014 as a Delaware corporation and is a holding company with no direct operations. The Parent Company's assets consist primarily of its equity interest in SSE Holdings, LLC ("SSE Holdings") and certain deferred tax assets.
On February 4, 2015, the Parent Company completed an initial public offering ("IPO") of 5,750,000 shares of its Class A common stock at a public offering price of $21.00 per share, which includes 750,000 shares issued pursuant to the underwriters' over-allotment option. The Parent Company received $112,298 in proceeds, net of underwriting discounts and commissions, which it used to purchase newly-issued membership interests from SSE Holdings at a price per interest equal to the initial public offering price of its Class A common stock.
The Parent Company's cash inflows are primarily from cash dividends or distributions and other transfers from SSE Holdings. The amounts available to the Parent Company to fulfill cash commitments and pay cash dividends on its common stock are subject to certain restrictions in SSE Holdings' revolving credit agreement. See Note 8 to the consolidated financial statements.
NOTE 2: BASIS OF PRESENTATION
These condensed parent company financial statements should be read in conjunction with the consolidated financial statements of Shake Shack Inc. and the accompanying notes thereto, included in this Annual Report on Form 10-K. For purposes of these condensed financial statements, the Parent Company's interest in SSE Holdings is recorded based upon its proportionate share of SSE Holdings' net assets (similar to presenting them on the equity method).
The Parent Company is the sole managing member of SSE Holdings, and pursuant to the Third Amended and Restated LLC Agreement of SSE Holdings (the “SSE Holdings LLC Agreement”), receives compensation in the form of reimbursements for all costs associated with being a public company and maintaining its existence. Intercompany revenue consists of these reimbursement payments and is recognized when the corresponding expense to which it relates is recognized.
Certain intercompany balances presented in these condensed parent company financial statements are eliminated in the consolidated financial statements. As of December 27, 2017, $4,217 of intercompany payables were eliminated in consolidation and $1,655 of intercompany payables were eliminated in consolidation as of December 28, 2016. For fiscal 2017, $1,466 and $22,090 of intercompany revenue and equity in net income of subsidiaries, respectively, was eliminated in consolidation. For fiscal 2016, $1,603 and $16,982 of intercompany revenue and equity in net income of subsidiaries, respectively, was eliminated in consolidation. Related party amounts that were not eliminated in the consolidated financial statements include the Parent Company's liabilities under the tax receivable agreement, which totaled $159,373 and $272,482 as of December 27, 2017 and December 28, 2016, respectively.
NOTE 3: COMMITMENTS AND CONTINGENCIES
On February 4, 2015, the Parent Company entered into a tax receivable agreement with the non-controlling interest holders that provides for payments to the non-controlling interest holders of 85% of the amount of any tax benefits that the Parent Company actually realizes, or in some cases is deemed to realize, as a result of certain transactions. See Note 14 to the consolidated financial statements for more information regarding the Parent Company's tax receivable agreement. As described in Note 17 to the consolidated financial statements, amounts payable under the tax receivable agreement are contingent upon, among other things, (i) generation of future taxable income of Shake Shack Inc. over the term of the tax receivable agreement and (ii) future changes in tax laws.
In December 2017, the Tax Cuts and Jobs Act of 2017 (the "TCJA") was enacted into law. The TCJA provides for significant changes to the U.S. Internal Revenue Code of 1986, as amended, including the reduction of the U.S. federal corporate income tax rate from 35% to 21%, among other provisions. As a result of the TCJA, we recognized a $125,859 benefit in other income related to the reduction in liabilities under its tax receivable agreement.
As of December 27, 2017 and December 28, 2016, liabilities under the tax receivable agreement totaled $159,373 and $272,482, respectively.
NOTE 4: SUPPLEMENTAL CASH FLOW INFORMATION
The following table sets forth supplemental cash flow information for fiscal 2017, 2016 and 2015:
 
 
 
 
 
 
2017

 
2016

 
2015

Cash paid for:
 
 
 
 
 
 
Income taxes
$
253

 
$
576

 
$
—

 
Interest
2

 
—

 
—

Non-cash investing activities:
 
 
 
 
 
 
Accrued contribution related to stock option exercises
7,586

 
1,116

 
—

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

 
—

 
6

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

 
—

 
2

 
Class A common stock issued in connection with the acquisition of LLC Interests upon redemption by the non-controlling interest holders
4,415

 
18,944

 
19,933

 
Non-cash contribution made in connection with equity awards granted to employees of SSE Holdings
5,497

 
5,304

 
2,355

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

 
—

 
(6
)
 
Cancellation of Class B common stock in connection with the redemption of LLC Interests
(1
)
 
(5
)
 
(6
)
 
Cancellation of Class B common stock in connection with the USC Merger
—

 
—

 
(2
)
 
Establishment of liabilities under tax receivable agreement
18,973

 
100,063

 
173,090

SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS
SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS
Schedule II: Valuation and Qualifying Accounts
 
 
 
Balance at beginning of period

 
Additions
 
 
Reductions

 
Balance at end of period

(in thousands)
 
 
Charged to costs and expenses

 
Charged to other accounts

 
 
Deferred tax asset valuation allowance:
 
 
 
 
 
 
 
 
 
 
Fiscal year ended December 31, 2014
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Fiscal year ended December 30, 2015
 
$
—

 
$
—

 
$
39,700

(1)
$
(16,545
)
 
$
23,155

Fiscal year ended December 28, 2016
 
$
23,155

 
$
90

 
$
1,965

(1)
$
(9,642
)
 
$
15,568

Fiscal year ended December 27, 2017
 
$
15,568

 
$
—

 
$
3,455

(1)
$
(8,909
)
(2)
$
10,114

(1)
Amount relates to a valuation allowance established on deferred tax assets related to our investment in SSE Holdings.
(2)
Amount includes a $4,780 remeasurement adjustment related to the enactment of the TCJA, which was recognized through earnings.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
Basis of Presentation 
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include our accounts and the accounts of our subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior period amounts to conform to the current year presentation.
SSE Holdings is considered a variable interest entity. Shake Shack Inc. is the primary beneficiary as we have the majority economic interest in SSE Holdings and, as the sole managing member, have decision making authority that significantly affects the economic performance of the entity, while the limited partners have no substantive kick-out or participating rights. As a result, we will continue to consolidate SSE Holdings. The assets and liabilities of SSE Holdings represent substantially all of our consolidated assets and liabilities with the exception of certain deferred taxes and liabilities under the Tax Receivable Agreement. As of December 27, 2017 and December 28, 2016, the net assets of SSE Holdings were $197,301 and $158,845, respectively. The assets of SSE Holdings are subject to certain restrictions in SSE Holdings' revolving credit agreements. See Note 8 for more information.
Fiscal Year 
Fiscal Year
We operate on a 52/53 week fiscal year ending on the last Wednesday in December. Fiscal year 2017 contained 52 weeks and ended on December 27, 2017. Fiscal year 2016 contained 52 weeks and ended on December 28, 2016. Fiscal year 2015 contained 52 weeks and ended on December 30, 2015. Unless otherwise stated, references to years in this report relate to fiscal years.
Use of Estimates 
Use of Estimates
The preparation of these consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of sales and expenses during the reporting period. Actual results could differ from those estimates.
Segment Reporting 
Segment Reporting
We own and operate Shacks in the United States. We also have domestic and international licensed operations. Our chief operating decision maker (the "CODM") is our Chief Executive Officer. As the CODM reviews financial performance and allocates resources at a consolidated level on a recurring basis, we have one operating segment and one reportable segment.
Fair Value Measurements 
Fair Value Measurements
We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, we assume the highest and best use of the asset by market participants in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions, and credit risk.
Assets and liabilities are classified using a fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
▪
Level 1 - Quoted prices in active markets for identical assets or liabilities
▪
Level 2 - Observable inputs other than quoted prices in active markets for identical assets or liabilities, quoted prices for identical assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities
▪
Level 3 - Inputs that are both unobservable and significant to the overall fair value measurements reflecting an entity's estimates of assumptions that market participants would use in pricing the asset or liability
Cash and Cash Equivalents 
Cash and Cash Equivalents
Cash and cash equivalents consist primarily of cash on hand, deposits with banks, and short-term, highly liquid investments that have original maturities of three months or less. Cash equivalents are stated at cost, which approximates fair value. Cash equivalents consist primarily of money market funds.
Accounts Receivable 
Accounts Receivable
Accounts receivable consist primarily of receivables from landlords for tenant improvement allowances, receivables from our licensees for licensing revenue and related reimbursements, credit card receivables and vendor rebates. We evaluate the collectibility of our accounts receivable based on a variety of factors, including historical experience, current economic conditions and other factors.
Inventories 
Inventories
Inventories, which consist of food, beer, wine, other beverages and retail merchandise, are stated at the lower of cost or net realizable value with cost determined on a first-in, first-out basis. No adjustment is deemed necessary to reduce inventory to net realizable value due to the rapid turnover and high utilization of inventory.
Property and Equipment 
Property and Equipment
Property and equipment is stated at historical cost less accumulated depreciation. Property and equipment is depreciated based on the straight-line method over the estimated useful lives of the assets, generally ranging from three to seven years for equipment, furniture and fixtures, and computer equipment and software. Leasehold improvements are depreciated over the shorter of their estimated useful life or the related lease life, generally ranging from 10 to 15 years. Landlord funded assets are depreciated over the shorter of their estimated useful life or the related lease life, generally ranging from 10 to 15 years. For leases with renewal periods at our option, we use the original lease term, excluding renewal option periods, to determine estimated useful lives.
Costs incurred when constructing Shacks are capitalized. The cost of repairs and maintenance are expensed when incurred. Costs for refurbishments and improvements that significantly increase the productive capacity or extend the useful life of the asset are capitalized. When assets are disposed of, the resulting gain or loss is recognized on the Consolidated Statements of Income (Loss).
We assess potential impairments to our long-lived assets, which includes property and equipment, whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of an asset is measured by a comparison of the carrying amount of an asset group to its estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset exceeds the fair value of the asset.
Deferred Financing Costs 
Deferred Financing Costs
Deferred financing costs incurred in connection with the issuance of long-term debt and establishing credit facilities are capitalized and amortized to interest expense based on the related debt agreements. Deferred financing costs are included in other assets on the Consolidated Balance Sheets.
Other Assets 
Other Assets
Other assets consist primarily of long-term marketable securities, security deposits, transferable liquor licenses and certain custom furniture pre-ordered for future Shacks and yet to be placed in service.
The costs of obtaining non-transferable liquor licenses that are directly issued by local government agencies for nominal fees are expensed as incurred. The costs of purchasing transferable liquor licenses through open markets in jurisdictions with a limited number of authorized liquor licenses are capitalized as indefinite-lived intangible assets. Annual liquor license renewal fees are expensed over the renewal term. As of December 27, 2017 and December 28, 2016, indefinite-lived intangible assets relating to transferable liquor licenses totaled $894 and $701, respectively. We evaluate our indefinite-lived intangible assets for impairment annually during our fiscal fourth quarter, and whenever events or changes in circumstances indicate that an impairment may exist. When evaluating other intangible assets for impairment, we may first perform a qualitative assessment to determine whether it is more likely than not that an intangible asset group is impaired. If we do not perform the qualitative assessment, or if we determine that it is not more likely than not that the fair value of the intangible asset group exceeds its carrying amount, we calculate the estimated fair value of the intangible asset group. If the carrying amount of the intangible asset group exceeds the estimated fair value, an impairment charge is recorded to reduce the carrying value to the estimated fair value. In addition, we continuously monitor and may revise our intangible asset useful lives if and when facts and circumstances change.
Equity-based Compensation 
Equity-based Compensation
Equity-based compensation expense is measured based on fair value. For awards with graded-vesting features and service conditions only, compensation expense is recognized on a straight-line basis over the total requisite service period for the entire award. For awards with graded-vesting features and a combination of service and performance conditions, compensation expense is recognized using a graded-vesting attribution method over the vesting period based on the most probable outcome of the performance conditions. Forfeitures are recognized as they occur for all equity awards. Equity-based compensation expense is included within general and administrative expenses and labor and related expenses on the Consolidated Statements of Income (Loss).
Leases 
Leases
We lease all of our domestic company-operated Shacks, our home office and certain equipment under various non-cancelable lease agreements that expire on various dates through 2035. Generally, our real estate leases have initial terms ranging from 10 to 15 years and typically include two five-year renewal options. At the inception of each lease, we determine its classification as an operating or capital lease. Most of our leases are classified as operating leases and typically provide for fixed minimum rent payments and/or contingent rent payments based upon sales in excess of specified thresholds. When the achievement of such sales thresholds are deemed to be probable, contingent rent is accrued in proportion to the sales recognized during the period. For operating leases that include rent holidays and rent escalation clauses, we recognize rent expense on a straight-line basis over the lease term from the date we take possession of the leased property. The difference between the straight-line rent amounts and amounts payable under the lease agreements is recorded as deferred rent and is included as rent expense in occupancy and related expenses on the Consolidated Statements of Income (Loss). Rent expense incurred before a Shack opens is recorded in pre-opening costs. Once a domestic company-operated Shack opens, we record the straight-line rent expense and any contingent rent, if applicable, in occupancy and related expenses on the Consolidated Statements of Income (Loss).
Many of our leases also require us to pay real estate taxes, common area maintenance costs and other occupancy costs which are included in occupancy and related expenses on the Consolidated Statements of Income (Loss).
We expend cash for leasehold improvements to build out and equip our leased premises. Generally, a portion of the leasehold improvements and building costs are reimbursed by our landlords as landlord incentives pursuant to agreed-upon terms in our lease agreements. If obtained, landlord incentives usually take the form of up-front cash, full or partial credits against our future minimum or contingent rents otherwise payable by us, or a combination thereof. When contractually due, we classify landlord incentives as deferred rent on the Consolidated Balance Sheets and amortize the landlord incentives on a straight-line basis over the lease term as a reduction of occupancy costs and related expenses or pre-opening costs on the Consolidated Statements of Income (Loss).
Lease Financing Arrangements
In certain leasing arrangements, due to our involvement in the construction of the leased assets, we are considered the owner of the leased assets for accounting purposes. In such cases, in addition to capitalizing our own construction costs, we capitalize the construction costs funded by the landlord related to our leased premises, and also recognize a corresponding liability for those costs as deemed landlord financing. If, upon completion of construction, the arrangement does not meet the sales recognition criteria under the sale-leaseback accounting guidance, we are precluded from de-recognizing the landlord-funded asset and related financing obligation and continue to account for the landlord-funded asset as if we were the legal owner. If de-recognition is permitted we are required to account for the lease as either an operating or capital lease.
As of December 27, 2017, we were deemed to be the accounting owner of 23 leased Shacks, 11 of which were under construction as of the end of the period.
Revenue Recognition 
Revenue Recognition
Revenue consists of Shack sales and licensing revenue. Revenue from Shack sales are presented net of discounts and recognized when food and beverage products are sold. Sales tax collected from customers is excluded from Shack sales and the obligation is included in sales tax payable until the taxes are remitted to the appropriate taxing authorities. Revenue from our gift cards are deferred and recognized upon redemption. Licensing revenues include initial territory fees, restaurant opening fees, and ongoing licensing fees from licensed Shacks. Initial territory fees are recorded as deferred revenue when received and recognized as revenue on a straight-line basis over the term of the licensing agreement. Restaurant opening fees are recorded as deferred revenue when received, and recognized as revenue when a licensed Shack is opened and all material services and conditions related to the fee have been substantially performed. Ongoing licensing fees from these Shacks are based on a percentage of sales and are recognized as revenue as the fees are earned and become receivable from the licensee.
Income Taxes 
Income Taxes
We account for income taxes pursuant to the asset and liability method which requires the recognition of deferred income tax assets and liabilities related to the expected future tax consequences arising from temporary differences between the carrying amounts and tax bases of assets and liabilities based on enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse. Any effects of changes in income tax rates or laws are included in income tax expense in the period of enactment. A valuation allowance is recognized if we determine it is more likely than not that all or a portion of a deferred tax asset will not be recognized.
Pre-Opening Costs 
Pre-Opening Costs
Pre-opening costs are expensed as incurred and consist primarily of legal fees, marketing expenses, occupancy, manager and employee wages, travel and related training costs incurred prior to the opening of a Shack.
Advertising 
Advertising
The cost of advertising is expensed as incurred.
Recently Issued Accounting Pronouncements 
Recently Adopted Accounting Pronouncements     
We adopted the Accounting Standards Updates (“ASUs”) summarized below in fiscal 2017. The effects of adoption did not have a material impact on our consolidated financial statements.
Accounting Standards Update (“ASU”)
Description
Date
Adopted
Improvements to Employee Share-Based Payment Accounting
(ASU 2016-09)


This standard simplifies certain aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, certain classifications on the statement of cash flows, and an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur. Upon adoption, we made such policy election. The adoption methodology applied varied based on each applicable provision of the standard, and none of the provisions had a material impact on our consolidated financial statements.

December 29, 2016

Simplifying the Measurement of Inventory (ASU 2015-11)


This standard applies to inventory measured using methods other than last-in, first-out (LIFO) or the retail method, and requires entities to measure such inventory at the lower of cost or net realizable value. It was applied prospectively.



December 29, 2016


Recently Issued Accounting Pronouncements       
Accounting Standards Update (“ASU”)
Description
Expected Impact
Effective Date
Statement of Cash Flows: Classification of Certain Cash Receipts and Payments
(ASU 2016-15)

This standard provides guidance on eight specific cash flow issues with the objective of reducing diversity in practice. It should be applied retrospectively to each period presented, subject to certain conditions.
We do not expect this standard to have a material impact on our consolidated financial statements.




December 28, 2017

Recognition and Measurement of Financial Assets and Financial Liabilities
(ASU 2016-01)
For public business entities, this standard requires: (i) certain equity investments to be measured at fair value with changes in fair value recognized in net income; (ii) a qualitative assessment to identify impairment of equity investments without readily determinable fair values; (iii) elimination of the requirement to disclose the method(s) and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost on the balance sheet; (iv) use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (v) separate presentation in other comprehensive income of the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (vi) separate presentation of financial assets and liabilities by measurement category and form of financial asset in the financial statements; and (vii) an entity to evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. The standard should be applied by means of a cumulative-effect adjustment to the balance sheet at the beginning of the fiscal year of adoption. Early adoption is permitted, subject to certain conditions resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value.


We do not expect this standard to have a material impact on our consolidated financial statements.

December 28, 2017
Leases
(ASU 2016-02, 2018-01)

This standard establishes a new lease accounting model, which introduces the recognition of lease assets and liabilities for those leases classified as operating leases under previous GAAP. It should be applied using a modified retrospective approach, with the option to elect various practical expedients. Early adoption is permitted.


We are currently evaluating the impact this standard will have on our consolidated financial statements. We have developed an implementation project plan, and are in process of identifying the complete population of leases to be analyzed under the new standard. We plan to adopt the standard on December 27, 2018.

December 27, 2018

Accounting Standards Update (“ASU”)
Description
Expected Impact
Effective Date
Revenue from Contracts with Customers and related standards (ASU’s 2014-09, 2015-14, 2016-08, 2016-10, 2016-12, 2016-20)
This standard supersedes the existing revenue recognition guidance and provides a new framework for recognizing revenue. The core principle of the standard 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. The new standard also requires significantly more comprehensive disclosures than the existing standard. Guidance subsequent to ASU 2014-09 has been issued to clarify various provisions in the standard, including principal versus agent considerations, identifying performance obligations, licensing transactions, as well as various technical corrections and improvements. This standard may be adopted using either a retrospective or modified retrospective method. Early adoption is permitted.

We are substantially complete with our evaluation of the impact this standard is expected to have on our consolidated financial statements.

Licensing revenue
Revenue recognition related to sales-based royalties, which represents a significant portion of the licensing revenue balance, will not change from current policy. However, the pattern and timing of revenue recognition related to the fixed fees associated with our licensing agreements (such as restaurant opening and initial territory fees) will differ from current policy.
Currently, restaurant opening fees are recorded as deferred revenue when received and proportionate amounts are recognized as revenue when a licensed Shack is opened and all material services and conditions related to the fee have been substantially performed. Territory fees are recorded as deferred revenue when received and recognized as revenue on a straight-line basis over the term of the license agreement, which generally begins upon execution of the contract.
Under the new standard, the license granted to each restaurant under each existing contract is considered a performance obligation. All other promises (such as providing assistance during the opening of a restaurant) will be combined with the license as one performance obligation. Accordingly, we will allocate the total transaction price (comprised of the restaurant opening and territory fees) to each restaurant expected to be opened by the licensee under the contract. We will recognize the fee allocated to each restaurant as revenue on a straight-line basis over the restaurant’s license term, which generally begins when the restaurant opens.

Shack sales
We do not currently expect a significant impact to Shack sales as a result of the new revenue standard.

Adoption and transition adjustment
We plan to adopt the standard on December 28, 2017, utilizing a modified retrospective transition approach. The adoption will result in a decrease to retained earnings of approximately $1,574 on the transition date, with a corresponding increase of $1,769 in other long-term liabilities, a decrease of $68 in other current liabilities, an increase of $100 to accounts receivable, with the remaining impact representing the tax impact of the transition adjustment, as an increase to deferred tax assets.
December 28, 2017

FAIR VALUE MEASUREMENTS (Tables)
Schedule of Cash and Cash Equivalents 
The following tables summarize our cash, cash equivalents and marketable securities by significant investment categories as of December 27, 2017 and December 28, 2016:
 
 
December 27, 2017
 
 
Cost Basis

 
 Gross Unrealized Gains

 
 Gross Unrealized Losses

 
 Fair Value

 
 Cash and Cash Equivalents

 
Marketable Securities

Cash
$
16,138

 
$
—

 
$
—

 
$
16,138

 
$
16,138

 
$
—

Level 1:
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
5,369

 
—

 
—

 
5,369

 
5,369

 
—

 
Mutual funds
60,985

 
61

 
(122
)
 
60,924

 
—

 
60,924

Level 2:
 
 
 
 
 
 
 
 
 
 
 
 
Corporate debt securities(1)
2,125

 
2

 
(15
)
 
2,112

 
—

 
2,112

Total
$
84,617

 
$
63

 
$
(137
)
 
$
84,543

 
$
21,507

 
$
63,036


 
 
December 28, 2016
 
 
Cost Basis

 
 Gross Unrealized Gains

 
 Gross Unrealized Losses

 
 Fair Value

 
 Cash and Cash Equivalents

 
Marketable Securities

Cash
$
6,322

 
$
—

 
$
—

 
$
6,322

 
$
6,322

 
$
—

Level 1:
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
5,285

 
—

 
—

 
5,285

 
5,285

 
—

 
Mutual funds
60,232

 
—

 
—

 
60,232

 
—

 
60,232

Level 2:
 
 
 
 
 
 
 
 
 
 
 
 
Corporate debt securities(1)
2,473

 
3

 
(30
)
 
2,446

 
—

 
2,446

Total
$
74,312

 
$
3

 
$
(30
)
 
$
74,285

 
$
11,607

 
$
62,678


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

Schedule of Unrealized Loss on Investments 
The following tables summarize the gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 27, 2017 and December 28, 2016, aggregated by investment category and the length of time that individual securities have been in a continuous loss position:
 
 
December 27, 2017
 
 
 
Less than 12 Months
 
 
12 Months or Greater
 
 
Total
 
 
Fair Value

 
Unrealized Loss

 
Fair Value

 
Unrealized Loss

 
Fair Value

 
Unrealized Loss

 
Money market funds
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
Mutual funds
—

 
—

 
—

 
—

 
—

 
—

 
Corporate debt securities
1,675

 
(12
)
 
162

 
(3
)
 
1,837

 
(15
)
Total
$
1,675

 
$
(12
)
 
$
162

 
$
(3
)
 
$
1,837

 
$
(15
)
 
 
December 28, 2016
 
 
 
Less than 12 Months
 
 
12 Months or Greater
 
 
Total
 
 
Fair Value

 
Unrealized Loss

 
Fair Value

 
Unrealized Loss

 
Fair Value

 
Unrealized Loss

 
Money market funds
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
Mutual funds
—

 
—

 
—

 
—

 
—

 
—

 
Corporate debt securities
1,244

 
(10
)
 
540

 
(20
)
 
1,784

 
(30
)
Total
$
1,244

 
$
(10
)
 
$
540

 
$
(20
)
 
$
1,784

 
$
(30
)
Schedule of Gain (Loss) on Investments 
A summary of other income from available-for-sale securities recognized during fiscal 2017, 2016 and 2015 is as follows:
 
2017

 
2016

 
2015

Available-for-sale securities:
 
 
 
 
 
 
Dividend income
$
830

 
$
296

 
$
—

 
Interest income
77

 
88

 
7

 
Loss on investments
(5
)
 
(7
)
 
—

Total other income, net
$
902

 
$
377

 
$
7

Schedule of Realized Gain (Loss) 
A summary of available-for-sale securities sold and gross realized gains and losses recognized during fiscal 2017 and 2016 is as follows:
 
2017

2016

Available-for-sale securities:
 
 
 
Gross proceeds from sales and redemptions
$
2,223

$
938

 
Cost basis of sales and redemptions
2,271

956

 
Gross realized gains included in net income
1

2

 
Gross realized losses included in net income
(49
)
(20
)
 
Amounts reclassified out of accumulated other comprehensive loss
47

19

Schedule of Investments Classified by Contractual maturity Dates 
The following table summarizes the estimated fair value of our investments in marketable debt securities, accounted for as available-for-sale securities and classified by the contractual maturity date of the securities:
 
December 27
2017

Due within one year
$
2,112

Due after one year through 5 years
—

Due after 5 years through 10 years
—

Due after 10 years
—

Total
$
2,112

ACCOUNTS RECEIVABLE (Tables)
Schedule of Accounts Receivable
The components of accounts receivable as of December 27, 2017 and December 28, 2016 are as follows:
 
December 27
2017

 
December 28
2016

Landlord receivables
$
1,660

 
$
2,606

Licensing receivables
1,422

 
1,278

Credit card receivables
2,018

 
1,589

Other receivables
541

 
533

Accounts receivable
$
5,641

 
$
6,006

INVENTORIES (Tables)
Inventories
Inventories consisted of the following:
 
December 27
2017

 
December 28
2016

Food
$
874

 
$
543

Wine
69

 
47

Beer
85

 
58

Beverages
111

 
79

Retail merchandise
119

 
79

Inventories
$
1,258

 
$
806

PROPERTY AND EQUIPMENT (Tables)
Schedule of Property and Equipment
Property and equipment consisted of the following:
 
December 27
2017

 
December 28
2016

Leasehold improvements
$
166,963

 
$
120,629

Landlord funded assets
7,472

 
—

Equipment
31,608

 
23,194

Furniture and fixtures
10,128

 
7,342

Computer equipment and software
12,721

 
8,710

Construction in progress (includes assets under construction from deemed landlord financing)
16,458

 
13,510

Property and equipment, gross
245,350

 
173,385

Less: accumulated depreciation
(58,255
)
 
(37,121
)
Property and equipment, net
$
187,095

 
$
136,264

SUPPLEMENTAL BALANCE SHEET INFORMATION (Tables)
Components of Other Current Liabilities
The components of other current liabilities as of December 27, 2017 and December 28, 2016 are as follows:
 
December 27
2017

 
December 28
2016

Sales tax payable
$
1,813

 
$
1,324

Current portion of liabilities under tax receivable agreement
937

 
4,580

Gift card liability
1,472

 
1,153

Other
3,715

 
3,116

Other current liabilities
$
7,937

 
$
10,173

LEASES (Tables)
Schedule of Rent Expense 
A summary of rent expense under operating lease agreements is as follows:
 
 
2017

 
2016

 
2015

Minimum rent
$
20,421

 
$
15,408

 
$
10,796

Deferred rent
838

 
2,122

 
1,482

Contingent rent
4,902

 
4,294

 
2,959

Total rent expense
$
26,161

 
$
21,824

 
$
15,237

Schedule of Future Minimum Rental Payments 
As of December 27, 2017, future minimum lease payments under non-cancelable operating leases and lease financing arrangements consisted of the following:
 
Operating
Leases

 
Deemed Landlord Financing(1)

2018
$
24,123

 
$
3,679

2019
26,045

 
4,614

2020
25,817

 
4,695

2021
26,076

 
4,747

2022
26,506

 
4,816

Thereafter
143,244

 
27,438

Total minimum lease payments
$
271,811

 
$
49,989


(1)
Amounts include minimum lease payments for 11 leases under construction as of December 27, 2017 where we are deemed the accounting owner. Final classification of lease payments under deemed landlord financing is subject to change pending sale lease-back analysis performed at the store opening date.
NON-CONTROLLING INTERESTS (Tables)
Schedule of Ownership Interest in SSE Holdings 
The following table summarizes the ownership interest in SSE Holdings as of December 27, 2017 and December 28, 2016:
 
2017
 
 
2016
 
 
LLC Interests

 
Ownership %

 
LLC Interests

 
Ownership %

Number of LLC Interests held by Shake Shack Inc.
26,527,477

 
72.1
%
 
25,151,384

 
69.1
%
Number of LLC Interests held by non-controlling interest holders
10,250,007

 
27.9
%
 
11,253,592

 
30.9
%
Total LLC Interests outstanding
36,777,484

 
100.0
%
 
36,404,976

 
100.0
%
Schedule of Non-Controlling Interest 
The following table summarizes the effects of changes in ownership in SSE Holdings on our equity during fiscal 2017, 2016 and 2015.
 
2017

 
2016

 
2015

Net income (loss) attributable to Shake Shack Inc.
$
(320
)
 
$
12,446

 
$
(8,776
)
Other comprehensive loss:
 
 
 
 
 
 
Unrealized holding losses on available-for-sale securities
(34
)
 
(10
)
 
(5
)
Transfers (to) from non-controlling interests:
 
 
 
 
 
 
Increase in additional paid-in capital as a result of settlement of unit appreciation rights
—

 
—

 
987

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

 
—

 
(75,182
)
 
Increase in additional paid-in capital as a result of the redemption of LLC Interests
4,415

 
16,986

 
19,934

 
Increase in additional paid-in capital as a result of the USC Merger
—

 
—

 
5,908

 
Increase in additional paid-in capital as a result of stock option exercises and the related income tax effect
4,451

 
825

 
—

Total effect of changes in ownership interest on equity attributable to Shake Shack Inc.
$
8,512

 
$
30,247

 
$
(57,134
)
EQUITY-BASED COMPENSATION (Tables)
Schedule of Equity-Based Compensation Expense Recognized 
A summary of equity-based compensation expense recognized during fiscal 2017, 2016 and 2015 is as follows:
 
 
2017

 
2016

 
2015

Unit appreciation rights
$
—

 
$
—

 
$
11,762

Restricted Class B units
—

 
—

 
605

Stock options
3,474

 
4,262

 
4,314

Performance stock units
1,869

 
1,092

 
—

Restricted stock units
280

 
—

 
—

Equity-based compensation expense
$
5,623

 
$
5,354

 
$
16,681

 
 
 
 
 
 
Total income tax benefit recognized related to equity-based compensation
$
198

 
$
168

 
$
482

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:
 
2017

 
2016

 
2015

Expected term (years)(1)
7.5

 
5.5

 
7.5

Expected volatility(2)
44.5
%
 
50.7
%
 
35.1
%
Risk-free interest rate(3)
2.1
%
 
1.5
%
 
1.6
%
Dividend yield(4)
—
%
 
—
%
 
—
%
(1)
Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method.
(2)
Expected volatility is based on the historical volatility of a selected peer group over a period equivalent to the expected term.
(3)
The risk-free rate rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term.
(4)
We have assumed a dividend yield of zero as we have no plans to declare dividends in the foreseeable future.
Schedule of Stock Options, Activity 
A summary of stock option activity for fiscal years 2017, 2016 and 2015 is as follows:
 
 
Stock
Options

 
Weighted
Average
Exercise
Price

 
Aggregate Intrinsic Value

 
Weighted Average Remaining Contractual Life (Years)
Outstanding as of December 31, 2014
—

 
$
—

 
 
 
 
 
Granted
2,622,281

 
21.00

 
 
 
 
 
Exercised
—

 
—

 
 
 
 
 
Forfeited
(47,300
)
 
(21.00
)
 
 
 
 
 
Expired
—

 
—

 
 
 
 
Outstanding as of December 30, 2015
2,574,981

 
$
21.00

 
 
 
 
 
Granted
16,931

 
34.74

 
 
 
 
 
Exercised
(160,230
)
 
21.00

 
 
 
 
 
Forfeited
(66,960
)
 
(21.00
)
 
 
 
 
 
Expired
—

 
—

 
 
 
 
Outstanding as of December 28, 2016
2,364,722

 
$
21.10

 
 
 
 
 
Granted
5,150

 
38.91

 
 
 
 
 
Exercised
(359,011
)
 
21.13

 
 
 
 
 
Forfeited
(291,520
)
 
(21.00
)
 
 
 
 
 
Expired
—

 
—

 
 
 
 
Outstanding as of December 27, 2017
1,719,341

 
$
21.16

 
$
39,851

 
7.1
Options vested and exercisable as of December 27, 2017
543,246

 
$
21.34

 
$
12,493

 
7.1
Options expected to vest as of December 27, 2017
1,098,577

 
$
21.08

 
$
25,549

 
7.1
Schedule of Nonvested Share Activity 
A summary of unvested stock option activity for fiscal years 2017, 2016 and 2015 is as follows:
 
 
Stock
Options

 
Weighted
Average
Grant-Date Fair Value

Unvested as of December 31, 2014
—

 
$
—

 
Vested
—

 
—

 
Granted
2,622,281

 
8.53

 
Forfeited
(47,300
)
 
8.59

Unvested as of December 30, 2015
2,574,981

 
$
8.53

 
Vested
(562,296
)
 
8.32

 
Granted
16,931

 
16.32

 
Forfeited
(65,365
)
 
8.59

Unvested as of December 28, 2016
1,964,251

 
$
8.66

 
Vested
(503,686
)
 
8.85

 
Granted
5,150

 
19.42

 
Forfeited
(289,620
)
 
8.59

Unvested as of December 27, 2017
1,176,095

 
$
8.64

Schedule of Information About Stock Options 
The following table summarizes information about stock options outstanding and exercisable as December 27, 2017:
 
 
Options Outstanding
 
 
Options Exercisable
 
 
 
Number Outstanding at December 27, 2017

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

 
Number Exercisable at December 27, 2017

 
Weighted Average Remaining Contractual Life (Years)

 
Weighted Average Exercise Price

Exercise Price
 
 
 
 
 
 
$21.00
 
1,700,665

 
7.1
 
$
21.00

 
529,720

 
7.1

 
$
21.00

$34.62
 
12,418

 
8.4
 
$
34.62

 
12,418

 
8.4

 
$
34.62

$36.41
 
1,108

 
8.9
 
$
36.41

 
1,108

 
8.9

 
$
36.41

$38.91
 
5,150

 
9.5
 
$
38.91

 
—

 
—

 
$
—

Schedule of Stock Options Outstanding and Exercisable, Option Plans 
A summary of performance stock unit activity for fiscal years 2017 and 2016 is as follows:
 
 
Performance
Stock
Units

 
Weighted
Average
Grant Date Fair Value

Outstanding as of December 30, 2015
—

 
$
—

 
Granted
63,600

 
38.41

 
Performance achievement(1)
—

 
—

 
Vested
—

 
—

 
Forfeited
(2,000
)
 
38.43

 
Expired
—

 
—

Outstanding as of December 28, 2016
61,600

 
$
38.41

 
Granted
87,596

 
37.90

 
Performance achievement(1)
9,545

 
38.40

 
Vested
(22,703
)
 
38.40

 
Forfeited
(11,196
)
 
38.28

 
Expired
—

 
—

Outstanding as of December 27, 2017
124,842

 
$
38.06


(1)
Represents incremental awards earned based on the achievement of performance conditions.
INCOME TAXES (Tables)
Schedule of Income before Income Tax, Domestic and Foreign 
The components of income before income taxes are follows:
 
2017

 
2016

 
2015

Domestic
$
152,204

 
$
20,623

 
$
244

Foreign
8,089

 
7,873

 
6,184

Income before income taxes
$
160,293

 
$
28,496

 
$
6,428

Schedule of Components of Income Tax Expense 
The components of income tax expense are as follows:
 
 
 
2017

 
2016

 
2015

Current income taxes:
 
 
 
 
 
 
Federal
$
518

 
$
3,767

 
$
2,474

 
State and local
3,615

 
2,439

 
1,131

 
Foreign
942

 
667

 
433

 
Total current income taxes
5,075

 
6,873

 
4,038

Deferred income taxes:
 
 
 
 
 
 
Federal
145,139

 
(48
)
 
(267
)
 
State and local
1,195

 
(475
)
 
(467
)
 
Total deferred income taxes
146,334

 
(523
)
 
(734
)
Income tax expense
$
151,409

 
$
6,350

 
$
3,304

Reconciliation of Income Tax Expense, US Income Tax Rate 
Reconciliations of income tax expense computed at the U.S. federal statutory income tax rate to the recognized income tax expense and the U.S. statutory income tax rate to our effective tax rates are as follows:
 
 
2017
 
 
2016
 
 
2015
 
Expected U.S. federal income taxes at statutory rate
$
56,103

35.0
 %
 
$
9,689

34.0
 %
 
$
2,186

34.0
 %
State and local income taxes, net of federal benefit
2,590

1.6
 %
 
1,461

5.1
 %
 
663

10.3
 %
Foreign withholding taxes
942

0.6
 %
 
667

2.3
 %
 
433

6.7
 %
Non-deductible expenses
223

0.1
 %
 
25

0.1
 %
 
653

10.2
 %
Tax credits
(1,230
)
(0.8
)%
 
(779
)
(2.7
)%
 
(141
)
(2.2
)%
Non-controlling interest
(3,273
)
(2.0
)%
 
(3,765
)
(13.2
)%
 
(490
)
(7.6
)%
Remeasurement of deferred tax assets in connection with the enactment of the TCJA
138,636

86.5
 %
 
—

—
 %
 
—

—
 %
Remeasurement of deferred tax assets in connection with other tax rate changes
1,657

1.0
 %
 
(1,353
)
(4.7
)%
 
—

—
 %
Remeasurement of liabilities under tax receivable agreement in connection with the enactment of the TCJA
(44,051
)
(27.4
)%
 
—

—
 %
 
—

—
 %
Other
(188
)
(0.1
)%
 
405

1.4
 %
 
—

—
 %
Income tax expense
$
151,409

94.5
 %
 
$
6,350

22.3
 %
 
$
3,304

51.4
 %
Schedule of Deferred Tax Assets and Liabilities 
The components of deferred tax assets and liabilities are as follows:
 
 
 
December 27
2017

 
December 28
2016

Deferred tax assets:
 
 
 
 
Investment in partnership
$
137,449

 
$
209,648

 
Tax Receivable Agreement
43,464

 
110,022

 
Deferred rent
571

 
561

 
Deferred revenue
59

 
53

 
Stock-based compensation
322

 
331

 
Net operating loss carryforwards
12,332

 
7,338

 
Tax credits
2,328

 
1,084

 
Other assets
176

 
108

 
Total gross deferred tax assets
196,701

 
329,145

Valuation allowance
(10,114
)
 
(15,568
)
Total deferred tax assets, net of valuation allowance
186,587

 
313,577

Deferred tax liabilities:
 
 
 
 
Property and equipment
(673
)
 
(370
)
 
Total gross deferred tax liabilities
(673
)
 
(370
)
Net deferred tax assets
$
185,914

 
$
313,207

EARNINGS PER SHARE (Tables)
Schedule of Earnings Per Share 
The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock for fiscal 2017, 2016 and 2015.
 
 
 
2017

 
2016

 
2015

Numerator:
 
 
 
 
 
 
Net income
$
8,884

 
$
22,146

 
$
3,124

 
Less: net income attributable to non-controlling interests
9,204

 
9,700

 
11,900

 
Net income (loss) attributable to Shake Shack Inc.
$
(320
)
 
$
12,446

 
$
(8,776
)
Denominator:
 
 
 
 
 
 
Weighted-average shares of Class A common stock outstanding—basic
25,876

 
22,956

 
13,588

 
Effect of dilutive securities:
 
 
 
 
 
 
 
Stock options
—

 
493

 
—

 
Weighted-average shares of Class A common stock outstanding—diluted
25,876

 
23,449

 
13,588

 
 
 
 
 
 
 
 
Earnings (loss) per share of Class A common stock—basic
$
(0.01
)
 
$
0.54

 
$
(0.65
)
Earnings (loss) per share of Class A common stock—diluted
$
(0.01
)
 
$
0.53

 
$
(0.65
)
Schedule of Antidilutive Securities 
The following table presents potentially dilutive securities excluded from the computations of diluted earnings per share of Class A common stock for fiscal 2017, 2016 and 2015.
 
 
 
2017
 
2016
 
2015
Stock options(1)
1,719,341

(3)
 
125

(2)
 
2,574,981

(3)
Performance stock units(1)
124,842

(3)
 
26,860

(4)
 
—

 
Restricted stock units(1)
44,476

(3)
 
—

 
 
—

 
Shares of Class B common stock
10,250,007

(5)
 
11,253,592

(5)
 
16,460,741

(5)

(1)
Represents the number of instruments outstanding at the end of the period. Application of the treasury stock method would reduce this amount if they had a dilutive effect and were included in the computation of diluted earnings per share.
(2)
Excluded from the computation of diluted earnings per share of Class A common stock because the exercise price of the stock options exceeded the average market price of our Class A common stock during the period ("out-of-the-money").
(3)
Excluded from the computation of diluted earnings per share of Class A common stock because the effect would have been anti-dilutive.
(4)
Weighted-average number of securities excluded from the computation of diluted earnings per share of Class A common stock because the performance conditions were not met for a portion of the fiscal year.
(5)
Shares of our Class B common stock are considered potentially dilutive shares of Class A common stock. Amounts have been excluded from the computations of diluted earnings per share of Class A common stock because the effect would have been anti-dilutive under the if-converted and two-class methods.
SUPPLEMENTAL CASH FLOW INFORMATION (Tables)
Schedule of Cash Flow Information
The following table sets forth supplemental cash flow information for fiscal 2017, 2016 and 2015:
 
 
2017

 
2016

 
2015

Cash paid for:
 
 
 
 
 
 
Income taxes, net of refunds
$
2,261

 
$
1,823

 
$
416

 
Interest, net of amounts capitalized
1,106

 
54

 
92

Non-cash investing activities:
 
 
 
 
 
 
Accrued purchases of property and equipment
7,526

 
6,150

 
4,904

 
Capitalized landlord assets for leases where we are deemed the accounting owner
10,125

 
1,985

 
—

 
Capitalized equity-based compensation
109

 
139

 
—

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

 
—

 
6

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

 
—

 
2

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

 
—

 
(6
)
 
Class A common stock issued in connection with the redemption of LLC Interests
1

 
5

 
6

 
Cancellation of Class B common stock in connection with the redemption of LLC Interests
(1
)
 
(5
)
 
(6
)
 
Cancellation of Class B common stock in connection with the USC Merger
—

 
—

 
(2
)
 
Establishment of liabilities under tax receivable agreement
18,973

 
100,063

 
173,090

 
Accrued distributions payable to non-controlling interest holders
—

 
607

 
—

GEOGRAPHIC INFORMATION (Tables)
Revenue from Customers by Geographic Areas
Revenue by geographic area for fiscal 2017, 2016 and 2015 is as follows:
 
 
2017

 
2016

 
2015

United States
$
348,575

 
$
260,602

 
$
184,408

Other countries
10,235

 
7,873

 
6,184

Total revenue
$
358,810

 
$
268,475

 
$
190,592

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables)
Schedule of Quarterly Financial Information
The following table sets forth certain unaudited financial information for each quarter of fiscal 2017 and 2016. The unaudited quarterly information includes all adjustments (consisting of normal recurring adjustments) that, in the opinion of management, are necessary for the fair presentation of the information presented. Operating results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year.
 
 
 
2017
 
 
 
 
First

 
Second

 
Third

 
Fourth

 
 
 
Quarter

 
Quarter

 
Quarter

 
Quarter

Total revenue
$
76,749

 
$
91,316

 
$
94,609

 
$
96,136

Operating income
5,628

 
11,737

 
10,610

 
5,838

Net income (loss)
3,862

 
8,184

 
7,870

 
(11,032
)
Net income (loss) attributable to Shake Shack Inc.
2,267

 
4,879

 
4,997

 
(12,463
)
Earnings (loss) per share(1):
 
 
 
 
 
 
 
 
Basic
$
0.09

 
$
0.19

 
$
0.19

 
$
(0.47
)
 
Diluted
$
0.09

 
$
0.19

 
$
0.19

 
$
(0.47
)

 
 
 
2016
 
 
 
 
First

 
Second

 
Third

 
Fourth

 
 
 
Quarter

 
Quarter

 
Quarter

 
Quarter

Total revenue
$
54,165

 
$
66,472

 
$
74,567

 
$
73,271

Operating income
4,714

 
8,933

 
9,170

 
4,988

Net income
3,351

 
6,549

 
6,789

 
5,457

Net income attributable to Shake Shack Inc.
1,462

 
3,298

 
3,766

 
3,920

Earnings per share(1):
 
 
 
 
 
 
 
 
Basic
$
0.07

 
$
0.15

 
$
0.16

 
$
0.16

 
Diluted
$
0.07

 
$
0.14

 
$
0.15

 
$
0.15

(1)
Basic and diluted earnings per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted earnings per share amounts may not equal annual basic and diluted earnings per share amounts.

NATURE OF OPERATIONS - Organization and Nature of Operations - Franchiser (Details)
Dec. 27, 2017
Restaurant
Franchisor Disclosure [Line Items]
 
Number of Restaurants
159 
Company-operated |
United States
 
Franchisor Disclosure [Line Items]
 
Number of Restaurants
90 
Licensed |
United States
 
Franchisor Disclosure [Line Items]
 
Number of Restaurants
10 
Licensed |
Other countries
 
Franchisor Disclosure [Line Items]
 
Number of Restaurants
59 
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 12 Months Ended
Feb. 4, 2015
Dec. 30, 2015
Class of Stock [Line Items]
 
 
Shares issued during the period (in shares)
5,968,841 
5,750,000 
IPO
 
 
Class of Stock [Line Items]
 
 
Shares issued during the period (in shares)
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 (in shares)
750,000 
 
NATURE OF OPERATIONS - Organizational Transactions (Details)
0 Months Ended 1 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended
Feb. 4, 2015
business
Feb. 4, 2015
entity
Feb. 28, 2015
Dec. 27, 2017
Dec. 28, 2016
Feb. 4, 2015
Feb. 4, 2015
Class B Common Stock
Feb. 4, 2015
Class B Common Stock
Common stock
Dec. 27, 2017
Class B Common Stock
Common stock
Dec. 28, 2016
Class B Common Stock
Common stock
Feb. 4, 2015
Class A Common Stock
Feb. 4, 2015
Class A Common Stock
Common stock
Dec. 30, 2015
Class A Common Stock
Common stock
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratio of common stock to limited liability company interest
 
 
 
 
 
 
1 
 
 
 
1 
 
 
Number of entities acquired
2 
2 
 
 
 
 
 
 
 
 
 
 
 
Shares issued during the period (in shares)
 
 
 
 
 
 
 
30,160,694 
 
 
 
5,968,841 
5,750,000 
LLC interests acquired (in shares)
5,968,841 
5,968,841 
5,968,841 
1,003,585 
5,207,149 
 
 
 
 
 
 
 
 
Effect of redemption (in shares)
 
 
 
 
 
 
 
5,968,841 
1,003,585 
5,207,149 
 
 
 
Ownership percent of noncontrolling interest
 
 
 
72.10% 
69.10% 
33.30% 
 
 
 
 
 
 
 
Noncontrolling owners ownership percentage
 
 
 
27.90% 
30.90% 
66.70% 
 
 
 
 
 
 
 
NATURE OF OPERATIONS - Secondary Offering (Details) (USD $)
0 Months Ended 1 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended
Feb. 4, 2015
Feb. 28, 2015
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Feb. 4, 2015
Feb. 4, 2015
Class A Common Stock
Common stock
Dec. 27, 2017
Class A Common Stock
Common stock
Dec. 28, 2016
Class A Common Stock
Common stock
Dec. 30, 2015
Class A Common Stock
Common stock
Feb. 4, 2015
Class B Common Stock
Common stock
Dec. 27, 2017
Class B Common Stock
Common stock
Dec. 28, 2016
Class B Common Stock
Common stock
Aug. 31, 2015
Secondary offering
Aug. 31, 2015
Secondary offering
Class A Common Stock
Common stock
Aug. 31, 2015
Secondary offering
Class B Common Stock
Common stock
Dec. 30, 2015
USC Merger
Dec. 30, 2015
USC Merger
Class A Common Stock
Common stock
Dec. 30, 2015
USC Merger
Class A Common Stock
Common stock
Dec. 30, 2015
USC Merger
Class B Common Stock
Common stock
Dec. 30, 2015
USC Merger
Class B Common Stock
Common stock
Dec. 27, 2017
Limited Liability Company
Dec. 28, 2016
Limited Liability Company
Aug. 31, 2015
Limited Liability Company
Secondary offering
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total shares offered (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,000,000 
 
 
 
 
 
 
 
 
 
Shares issued, share price (in dollars per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 60 
 
 
 
 
 
 
 
 
 
Conversion of units from former equity owners (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
844,727 
 
 
 
 
 
 
 
 
 
Redemptions (in shares)
 
 
 
 
 
 
 
1,003,585 
5,207,149 
 
 
 
 
 
3,155,273 
 
 
 
1,727,804 
 
1,727,804 
 
 
 
Number of units redeemed (in shares)
 
339,306 
 
 
1,727,804 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,003,585 
5,207,149 
3,155,273 
Effect of redemption (in shares)
 
 
 
 
 
 
 
 
 
 
5,968,841 
1,003,585 
5,207,149 
 
 
3,155,273 
 
 
 
1,727,804 
 
 
 
 
Units acquired during the period (in shares)
5,968,841 
5,968,841 
1,003,585 
5,207,149 
 
 
 
 
 
 
 
 
 
3,155,273 
 
 
1,727,804 
 
 
 
 
 
 
 
Shares issued during the period (in shares)
 
 
 
 
 
 
5,968,841 
 
 
5,750,000 
30,160,694 
 
 
 
 
 
 
1,727,804 
 
 
 
 
 
 
Ownership percent of noncontrolling interest
 
 
72.10% 
69.10% 
 
33.30% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noncontrolling owners ownership percentage
 
 
27.90% 
30.90% 
 
66.70% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Basis of Presentation (Details) (Variable Interest Entity, Primary Beneficiary, USD $)
In Thousands, unless otherwise specified
Dec. 27, 2017
Dec. 28, 2016
Variable Interest Entity, Primary Beneficiary
 
 
Variable Interest Entity [Line Items]
 
 
Net assets of SSE Holdings
$ 197,301 
$ 158,845 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Segment Reporting (Details)
12 Months Ended
Dec. 27, 2017
reportable_segment
operating_segment
Accounting Policies [Abstract]
 
Number of operating segments
1 
Number of reportable segments
1 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) (USD $)
12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Property, Plant and Equipment [Line Items]
 
 
 
Impairment charges
$ 0 
$ 0 
$ 0 
Equipment |
Minimum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life of asset
3 years 
 
 
Equipment |
Maximum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life of asset
7 years 
 
 
Furniture and fixtures |
Minimum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life of asset
3 years 
 
 
Furniture and fixtures |
Maximum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life of asset
7 years 
 
 
Computer equipment and software |
Minimum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life of asset
3 years 
 
 
Computer equipment and software |
Maximum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life of asset
7 years 
 
 
Leasehold improvements |
Minimum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life of asset
10 years 
 
 
Leasehold improvements |
Maximum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life of asset
15 years 
 
 
Landlord funded assets |
Minimum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life of asset
10 years 
 
 
Landlord funded assets |
Maximum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life of asset
15 years 
 
 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Other Assets (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 27, 2017
Dec. 28, 2016
Accounting Policies [Abstract]
 
 
Indefinite-lived intangible assets
$ 894 
$ 701 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Leases (Details)
12 Months Ended
Dec. 27, 2017
lease
renewal_option
Dec. 28, 2016
lease
Operating Leased Assets [Line Items]
 
 
Number of renewal options
2 
 
Period of renewal term
5 years 
 
Number of sale leaseback transactions, accounting owner
23 
8 
Number of sale leaseback transactions
11 
 
Minimum
 
 
Operating Leased Assets [Line Items]
 
 
Terms of lease contract
10 years 
 
Maximum
 
 
Operating Leased Assets [Line Items]
 
 
Terms of lease contract
15 years 
 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Advertising (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Accounting Policies [Abstract]
 
 
 
Advertising and promotions
$ 357 
$ 147 
$ 149 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - ASU Update (Details) (Subsequent Event, USD $)
In Thousands, unless otherwise specified
Dec. 28, 2017
Retained Earnings
 
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
New accounting pronouncement
$ 1,574 
Other Noncurrent Liabilities
 
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
New accounting pronouncement
1,769 
Current Liabilities
 
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
New accounting pronouncement
68 
Accounts Receivable
 
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
New accounting pronouncement
$ 100 
FAIR VALUE MEASUREMENTS - Cash, Cash Equivalents and Marketable Securities (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
 
 
 
 
Cost Basis
$ 21,507 
$ 11,607 
$ 70,849 
$ 2,677 
Cash and cash equivalents fair value
21,507 
11,607 
 
 
Gross Unrealized Gains
63 
3 
 
 
Gross Unrealized Losses
(137)
(30)
 
 
Fair value of marketable securities
63,036 
62,678 
 
 
Total cost basis
84,617 
74,312 
 
 
Total fair value
84,543 
74,285 
 
 
Level 1: |
Mutual Fund
 
 
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
 
 
Cost Basis
60,985 
60,232 
 
 
Cash and cash equivalents fair value
60,924 
60,232 
 
 
Gross Unrealized Gains
61 
 
 
 
Gross Unrealized Losses
(122)
 
 
 
Fair value of marketable securities
60,924 
60,232 
 
 
Level 2: |
Corporate debt securities
 
 
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
 
 
Marketable securities cost Basis
2,125 
2,473 
 
 
Gross Unrealized Gains
2 
3 
 
 
Gross Unrealized Losses
(15)
(30)
 
 
Fair value of marketable securities
2,112 
2,446 
 
 
Cash
 
 
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
 
 
Cost Basis
16,138 
6,322 
 
 
Cash and cash equivalents fair value
16,138 
6,322 
 
 
Money market funds |
Level 1:
 
 
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
 
 
Cost Basis
5,369 
5,285 
 
 
Cash and cash equivalents fair value
$ 5,369 
$ 5,285 
 
 
FAIR VALUE MEASUREMENTS - Additional Information (Details) (USD $)
12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Fair Value Disclosures [Abstract]
 
 
 
Net unrealized losses on available-for-sale securities
$ (74,000)
$ (27,000)
 
Impairment charges
$ 0 
$ 0 
$ 0 
FAIR VALUE MEASUREMENTS - Schedule of Gross Unrealized Losses and Fair Value (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 27, 2017
Dec. 28, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair Value (less than 12 months)
$ 1,675 
$ 1,244 
Unrealized Loss (less than 12 months)
(12)
(10)
Fair Value (12 months or greater)
162 
540 
Unrealized Loss (12 months or greater)
(3)
(20)
Fair Value
1,837 
1,784 
Unrealized Loss
(15)
(30)
Corporate debt securities
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair Value (less than 12 months)
1,675 
1,244 
Unrealized Loss (less than 12 months)
(12)
(10)
Fair Value (12 months or greater)
162 
540 
Unrealized Loss (12 months or greater)
(3)
(20)
Fair Value
1,837 
1,784 
Unrealized Loss
$ (15)
$ (30)
FAIR VALUE MEASUREMENTS - Schedule of Income for AFS Securities (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Fair Value Disclosures [Abstract]
 
 
 
Dividend income
$ 830 
$ 296 
$ 0 
Interest income
77 
88 
7 
Loss on investments
(5)
(7)
0 
Total other income, net
$ 902 
$ 377 
$ 7 
FAIR VALUE MEASUREMENTS - Schedule of AFS Sold (Details) (USD $)
12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Available-for-sale securities:
 
 
 
Gross proceeds from sales and redemptions
$ 2,223,000 
$ 938,000 
$ 0 
Cost basis of sales and redemptions
2,271,000 
956,000 
 
Gross realized gains included in net income
1,000 
2,000 
 
Gross realized losses included in net income
(49,000)
(20,000)
 
Amounts reclassified out of accumulated other comprehensive loss
$ 47,000 1
$ 19,000 1
$ 0 1
FAIR VALUE MEASUREMENTS - Estimated Fair Value of Investments (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 27, 2017
Fair Value Disclosures [Abstract]
 
Due within one year
$ 2,112 
Due after one year through 5 years
0 
Due after 5 years through 10 years
0 
Due after 10 years
0 
Total
$ 2,112 
ACCOUNTS RECEIVABLE - Schedule of Accounts Receivable (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 27, 2017
Dec. 28, 2016
Receivables [Abstract]
 
 
Landlord receivables
$ 1,660 
$ 2,606 
Licensing receivables
1,422 
1,278 
Credit card receivables
2,018 
1,589 
Other receivables
541 
533 
Accounts receivable
$ 5,641 
$ 6,006 
ACCOUNTS RECEIVABLE - Additional Information (Details) (USD $)
Dec. 27, 2017
Dec. 28, 2016
Receivables [Abstract]
 
 
Allowance for doubtful accounts
$ 0 
$ 0 
INVENTORIES - Schedule of Inventories (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 27, 2017
Dec. 28, 2016
Inventory [Line Items]
 
 
Inventories
$ 1,258 
$ 806 
Food
 
 
Inventory [Line Items]
 
 
Inventories
874 
543 
Wine
 
 
Inventory [Line Items]
 
 
Inventories
69 
47 
Beer
 
 
Inventory [Line Items]
 
 
Inventories
85 
58 
Beverages
 
 
Inventory [Line Items]
 
 
Inventories
111 
79 
Retail merchandise
 
 
Inventory [Line Items]
 
 
Inventories
$ 119 
$ 79 
PROPERTY AND EQUIPMENT (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
$ 245,350 
$ 173,385 
 
Less: accumulated depreciation
(58,255)
(37,121)
 
Property and equipment, net
187,095 
136,264 
 
Depreciation
21,704 
14,502 
10,222 
Leasehold improvements
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
166,963 
120,629 
 
Landlord funded assets
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
7,472 
0 
 
Equipment
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
31,608 
23,194 
 
Furniture and fixtures
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
10,128 
7,342 
 
Computer equipment and software
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
12,721 
8,710 
 
Construction in progress (includes assets under construction from deemed landlord financing)
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, gross
$ 16,458 
$ 13,510 
 
SUPPLEMENTAL BALANCE SHEET INFORMATION (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 27, 2017
Dec. 28, 2016
Supplemental Balance Sheet Disclosures [Abstract]
 
 
Sales tax payable
$ 1,813 
$ 1,324 
Current portion of liabilities under tax receivable agreement
937 
4,580 
Gift card liability
1,472 
1,153 
Other
3,715 
3,116 
Other current liabilities
$ 7,937 
$ 10,173 
DEBT (Details) (USD $)
12 Months Ended 12 Months Ended 0 Months Ended 1 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Dec. 27, 2017
Notes payable
Dec. 28, 2016
Notes payable
Mar. 31, 2013
Notes payable
Dec. 27, 2017
Letter of credit
Feb. 4, 2015
Revolving Credit Facility
Line of credit
Dec. 27, 2017
Revolving Credit Facility
Line of credit
Dec. 28, 2016
Revolving Credit Facility
Line of credit
Feb. 4, 2015
Revolving Credit Facility
Line of credit
Dec. 27, 2017
Revolving Credit Facility
Letter of credit
Line of credit
Feb. 4, 2015
Revolving Credit Facility
Letter of credit
Line of credit
May 31, 2016
Revolving Credit Facility
Minimum
Line of credit
London Interbank Offered Rate (LIBOR)
May 31, 2016
Revolving Credit Facility
Minimum
Line of credit
Prime rate
May 31, 2016
Revolving Credit Facility
Maximum
Line of credit
London Interbank Offered Rate (LIBOR)
May 31, 2016
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 
683,000 
 
 
 
 
 
Term to maturity
 
 
 
 
 
 
1 year 
5 years 
 
 
 
 
 
 
 
 
 
Basis spread on variable rate
 
 
 
 
 
 
 
 
 
 
 
 
 
2.30% 
0.00% 
3.30% 
0.80% 
Short-term borrowings
 
 
 
 
 
 
 
 
0 
0 
 
 
 
 
 
 
 
Remaining borrowing capacity
 
 
 
 
 
 
 
 
19,317,000 
 
 
 
 
 
 
 
 
Notes payable face amount
 
 
 
 
 
313,000 
 
 
 
 
 
 
 
 
 
 
 
Stated interest rate
 
 
 
 
 
5.00% 
 
 
 
 
 
 
 
 
 
 
 
Notes payable
 
 
 
0 
0 
 
 
 
 
 
 
 
 
 
 
 
 
Deemed landlord financing
14,518,000 
2,007,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest costs incurred
1,806,000 
374,000 
440,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest costs capitalized
$ 164,000 
$ 0 
$ 108,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LEASES - Summary of Rent Expense (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Leases [Abstract]
 
 
 
Minimum rent
$ 20,421 
$ 15,408 
$ 10,796 
Deferred rent
838 
2,122 
1,482 
Contingent rent
4,902 
4,294 
2,959 
Total rent expense
$ 26,161 
$ 21,824 
$ 15,237 
LEASES - Narrative (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 27, 2017
lease
Dec. 28, 2016
lease
Dec. 30, 2015
Leases [Abstract]
 
 
 
Number of sale leaseback transactions, accounting owner
23 
8 
 
Common area maintenance costs, real estate taxes, and other occocupancy costs not included in rent expense
$ 4,570 
$ 3,229 
$ 2,119 
Number of sale leaseback transactions
11 
 
 
Deemed landlord financing
$ 14,518 
$ 2,007 
 
LEASES - Schedule of Future Minimum Lease Payments (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 27, 2017
lease
Operating Leases
 
2018
$ 24,123 
2019
26,045 
2020
25,817 
2021
26,076 
2022
26,506 
Thereafter
143,244 
Total minimum lease payments
271,811 
Deemed Landlord Financing
 
2018
3,679 
2019
4,614 
2020
4,695 
2021
4,747 
2022
4,816 
Thereafter
27,438 
Total minimum lease payments
$ 49,989 
Number of sale leaseback transactions
11 
EMPLOYEE BENEFIT PLANS - Deferred Compensation (Details) (Executive, Deferred Bonus, USD $)
1 Months Ended 12 Months Ended
Oct. 31, 2015
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Dec. 25, 2013
Executive |
Deferred Bonus
 
 
 
 
 
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
 
 
 
 
 
Deferred compensation award due to executive
 
 
 
 
$ 2,450,000 
Deferred compensation expense
 
0 
0 
0 
2,054,000 
Contributions by employer
$ 2,450,000 
 
 
 
 
EMPLOYEE BENEFIT PLANS - Defined Contribution Plan (Details) (USD $)
12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Employer contributions
$ 389,000 
$ 257,000 
$ 238,000 
Defined Contribution Plan, Initial Contribution
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Employer matching contribution percentage
100.00% 
 
 
Employer matching contribution as a percent of employees' gross pay
3.00% 
 
 
Defined Contribution Plan, Additional Contribution
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Employer matching contribution percentage
50.00% 
 
 
Employer matching contribution as a percent of employees' gross pay
3.00% 
 
 
Defined Contribution Plan, Additional Contribution |
Maximum
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Employer matching contribution as a percent of employees' gross pay
5.00% 
 
 
STOCKHOLDER'S EQUITY (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
0 Months Ended 1 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 1 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended
Feb. 4, 2015
board_of_director_class
business
Feb. 4, 2015
entity
Dec. 15, 2014
Feb. 28, 2015
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Feb. 4, 2015
Feb. 4, 2015
Class A Common Stock
Dec. 27, 2017
Class A Common Stock
Dec. 28, 2016
Class A Common Stock
Feb. 4, 2015
Class A Common Stock
Feb. 4, 2015
Class B Common Stock
Dec. 27, 2017
Class B Common Stock
Dec. 28, 2016
Class B Common Stock
Feb. 4, 2015
Class B Common Stock
Aug. 31, 2015
Secondary offering
Dec. 30, 2015
USC Merger
Feb. 4, 2015
Common stock
Class A Common Stock
Dec. 27, 2017
Common stock
Class A Common Stock
Dec. 28, 2016
Common stock
Class A Common Stock
Dec. 30, 2015
Common stock
Class A Common Stock
Feb. 4, 2015
Common stock
Class B Common Stock
Dec. 27, 2017
Common stock
Class B Common Stock
Dec. 28, 2016
Common stock
Class B Common Stock
Feb. 4, 2015
Common stock
IPO
Class A Common Stock
Feb. 4, 2015
Common stock
IPO
Class A Common Stock
Feb. 4, 2015
Common stock
Over-allotment option
Class A Common Stock
Aug. 31, 2015
Common stock
Secondary offering
Class A Common Stock
Aug. 31, 2015
Common stock
Secondary offering
Class B Common Stock
Dec. 30, 2015
Common stock
USC Merger
Class A Common Stock
Dec. 30, 2015
Common stock
USC Merger
Class A Common Stock
Dec. 30, 2015
Common stock
USC Merger
Class B Common Stock
Dec. 30, 2015
Common stock
USC Merger
Class B Common Stock
Dec. 27, 2017
Limited Liability Company
Dec. 28, 2016
Limited Liability Company
Aug. 31, 2015
Limited Liability Company
Secondary offering
Dec. 27, 2017
Stock options
Dec. 28, 2016
Stock options
Dec. 26, 2012
Unit Appreciation Rights Plan
Unit appreciation rights
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock, shares, issued (in shares)
 
 
 
 
 
 
 
 
 
26,527,477 
25,151,384 
 
 
10,250,007 
11,253,592 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
339,306 
Common stock, shares authorized (in shares)
 
 
 
 
 
 
 
 
 
200,000,000 
200,000,000 
200,000,000 
 
35,000,000 
35,000,000 
35,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock par value (in dollars per share)
 
 
 
 
 
 
 
 
 
$ 0.001 
$ 0.001 
$ 0.001 
 
$ 0.001 
$ 0.001 
$ 0.001 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock, shares authorized (in shares)
 
 
 
 
10,000,000 
10,000,000 
 
10,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of classes of directors
3 
3 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Board of directors, term
3 years 
3 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of votes per share
1 
1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratio of common stock to limited liability company interest
 
 
 
 
 
 
 
 
1 
 
 
 
1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares issued during the period (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,968,841 
 
 
5,750,000 
30,160,694 
 
 
5,750,000 
 
750,000 
 
 
1,727,804 
 
 
 
 
 
 
 
 
 
Shares issued, share price (in dollars per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 21 
 
$ 60 
 
 
 
 
 
 
 
 
 
 
 
Proceeds of issuance of initial public offering net of underwriting discounts and commissions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 112,298 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total conversion of units (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,000,000 
 
 
 
 
 
 
 
 
 
 
 
Conversion of units from former equity owners (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
844,727 
 
 
 
 
 
 
 
 
 
 
 
Redemptions (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,003,585 
5,207,149 
 
 
 
 
 
 
 
3,155,273 
 
 
1,727,804 
 
1,727,804 
 
 
 
 
 
 
Number of units redeemed (in shares)
 
 
 
339,306 
 
 
1,727,804 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,003,585 
5,207,149 
3,155,273 
 
 
 
Effect of redemption (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,968,841 
1,003,585 
5,207,149 
 
 
 
 
3,155,273 
 
 
1,727,804 
 
 
 
 
 
 
 
Number of entities acquired
2 
2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LLC interests acquired (in shares)
5,968,841 
5,968,841 
 
5,968,841 
1,003,585 
5,207,149 
 
 
 
 
 
 
 
 
 
 
3,155,273 
1,727,804 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
372,508 
154,976 
 
Member distribution threshold, percentage
 
 
27.30% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Member distributions
 
$ 11,125 
 
 
$ 0 
$ 0 
$ 11,125 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NON-CONTROLLING INTERESTS - Narrative (Details)
0 Months Ended 1 Months Ended 12 Months Ended
Feb. 4, 2015
entity
Feb. 28, 2015
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Feb. 4, 2015
Noncontrolling Interest [Line Items]
 
 
 
 
 
 
Weighted average ownership percentage
 
 
29.40% 
36.80% 
 
 
Units purchased during the period (shares)
 
5,750,000 
 
 
 
 
Units acquired during the period (in shares)
5,968,841 
5,968,841 
1,003,585 
5,207,149 
 
 
Number of entities acquired
2 
 
 
 
 
 
Number of units redeemed (in shares)
 
339,306 
 
 
1,727,804 
 
LLC interests issued for share-based compensation (shares)
 
339,306 
 
 
 
 
Ownership percent of noncontrolling interest
33.30% 
 
72.10% 
69.10% 
 
33.30% 
Class A Common Stock
 
 
 
 
 
 
Noncontrolling Interest [Line Items]
 
 
 
 
 
 
Ratio of common stock to limited liability company interest
1 
 
 
 
 
 
Limited Liability Company
 
 
 
 
 
 
Noncontrolling Interest [Line Items]
 
 
 
 
 
 
Number of units redeemed (in shares)
 
 
1,003,585 
5,207,149 
 
 
Stock options
 
 
 
 
 
 
Noncontrolling Interest [Line Items]
 
 
 
 
 
 
Units acquired during the period (in shares)
 
 
372,508 
154,976 
 
 
NON-CONTROLLING INTERESTS - Ownership Interest in SSE Holdings (Details)
Dec. 27, 2017
Dec. 28, 2016
Feb. 4, 2015
Noncontrolling Interest [Abstract]
 
 
 
Number of LLC Interests held by Shake Shack Inc. (in shares)
26,527,477 
25,151,384 
 
Number of LLC Interests held by Shake Shack Inc. (in percentage)
72.10% 
69.10% 
33.30% 
Number of LLC Interests held by non-controlling interest holders (in shares)
10,250,007 
11,253,592 
 
Number of LLC Interests held by non-controlling interest holders (in percentage)
27.90% 
30.90% 
66.70% 
Total LLC Interests outstanding (in shares)
36,777,484 
36,404,976 
 
Total LLC Interests outstanding (in percentage)
100.00% 
100.00% 
 
NON-CONTROLLING INTERESTS - Schedule of Non-Controlling Interest (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 27, 2017
Sep. 27, 2017
Jun. 28, 2017
Mar. 29, 2017
Dec. 28, 2016
Sep. 28, 2016
Jun. 29, 2016
Mar. 30, 2016
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Noncontrolling Interest [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) attributable to Shake Shack Inc.
$ (12,463)
$ 4,997 
$ 4,879 
$ 2,267 
$ 3,920 
$ 3,766 
$ 3,298 
$ 1,462 
$ (320)
$ 12,446 
$ (8,776)
Other comprehensive loss:
 
 
 
 
 
 
 
 
 
 
 
Unrealized holding losses on available-for-sale securities
 
 
 
 
 
 
 
 
(47)
(16)
(11)
Total effect of changes in ownership interest on equity attributable to Shake Shack Inc.
 
 
 
 
 
 
 
 
8,512 
30,247 
(57,134)
Unrealized holding losses on available-for-sale securities
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive loss:
 
 
 
 
 
 
 
 
 
 
 
Unrealized holding losses on available-for-sale securities
 
 
 
 
 
 
 
 
(34)
(10)
(5)
Increase in additional paid-in capital as a result of settlement of unit appreciation rights
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive loss:
 
 
 
 
 
 
 
 
 
 
 
Transfers (to) from non-controlling interests
 
 
 
 
 
 
 
 
0 
0 
987 
Stock options
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive loss:
 
 
 
 
 
 
 
 
 
 
 
Transfers (to) from non-controlling interests
 
 
 
 
 
 
 
 
4,451 
825 
 
Decrease in additional paid-in capital as a result of the organizational transactions completed in connection with our IPO
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive loss:
 
 
 
 
 
 
 
 
 
 
 
Transfers (to) from non-controlling interests
 
 
 
 
 
 
 
 
0 
0 
(75,182)
Increase in additional paid-in capital as a result of the redemption of LLC Interests
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive loss:
 
 
 
 
 
 
 
 
 
 
 
Transfers (to) from non-controlling interests
 
 
 
 
 
 
 
 
4,415 
16,986 
19,934 
Increase in additional paid-in capital as a result of the USC Merger
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive loss:
 
 
 
 
 
 
 
 
 
 
 
Transfers (to) from non-controlling interests
 
 
 
 
 
 
 
 
$ 0 
$ 0 
$ 5,908 
EQUITY-BASED COMPENSATION - Schedule of compensation expense recognized (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Equity-based compensation expense
$ 5,623 
$ 5,354 
$ 16,681 
Total income tax benefit recognized related to equity-based compensation
198 
168 
482 
Unit appreciation rights
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Equity-based compensation expense
0 
0 
11,762 
Restricted Stock Units
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Equity-based compensation expense
280 
0 
0 
Stock options
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Equity-based compensation expense
3,474 
4,262 
4,314 
Performance Shares
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Equity-based compensation expense
1,869 
1,092 
0 
Class B Common Stock |
Restricted Stock Units
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Equity-based compensation expense
$ 0 
$ 0 
$ 605 
EQUITY-BASED COMPENSATION - Narrative (Details) (USD $)
12 Months Ended 1 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Dec. 27, 2017
Unit appreciation rights
Dec. 28, 2016
Unit appreciation rights
Dec. 30, 2015
Unit appreciation rights
Dec. 27, 2017
Restricted Class B units
Dec. 28, 2016
Restricted Class B units
Dec. 30, 2015
Restricted Class B units
Dec. 27, 2017
Stock options
Dec. 28, 2016
Stock options
Dec. 30, 2015
Stock options
Dec. 27, 2017
Performance Shares
Dec. 28, 2016
Performance Shares
Dec. 30, 2015
Performance Shares
Dec. 27, 2017
Minimum
Restricted Class B units
Dec. 27, 2017
Maximum
Restricted Class B units
Jan. 31, 2015
2015 Incentive Award Plan
Jan. 31, 2015
2015 Incentive Award Plan
Minimum
Stock options
Jan. 31, 2015
2015 Incentive Award Plan
Maximum
Stock options
Dec. 30, 2015
Unit Appreciation Rights Plan
Unit appreciation rights
Dec. 26, 2012
Unit Appreciation Rights Plan
Unit appreciation rights
Dec. 27, 2017
Unit Appreciation Rights Plan
Unit appreciation rights
Dec. 28, 2016
Unit Appreciation Rights Plan
Unit appreciation rights
Dec. 27, 2017
2015 Incentive Award Plan
Dec. 28, 2016
2015 Incentive Award Plan
Dec. 30, 2015
2015 Incentive Award Plan
Dec. 31, 2014
2015 Incentive Award Plan
Dec. 27, 2017
2015 Incentive Award Plan
Restricted Class B units
Dec. 28, 2016
2015 Incentive Award Plan
Restricted Class B units
Dec. 30, 2015
2015 Incentive Award Plan
Restricted Class B units
Dec. 27, 2017
2015 Incentive Award Plan
Stock options
Dec. 28, 2016
2015 Incentive Award Plan
Stock options
Dec. 30, 2015
2015 Incentive Award Plan
Stock options
Dec. 27, 2017
2015 Incentive Award Plan
Performance Shares
Dec. 28, 2016
2015 Incentive Award Plan
Performance Shares
Dec. 30, 2015
2015 Incentive Award Plan
Performance Shares
Dec. 27, 2017
2015 Incentive Award Plan
Minimum
Restricted Class B units
Dec. 27, 2017
2015 Incentive Award Plan
Minimum
Performance Shares
Dec. 27, 2017
2015 Incentive Award Plan
Maximum
Restricted Class B units
Dec. 27, 2017
2015 Incentive Award Plan
Maximum
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity based compensation
$ 109,000 
$ 139,000 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Grants in period (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
31,303 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock, shares, issued (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
339,306 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares paid for tax withholding (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22,554 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity-based compensation expense
5,623,000 
5,354,000 
16,681,000 
0 
0 
11,762,000 
280,000 
0 
0 
3,474,000 
4,262,000 
4,314,000 
1,869,000 
1,092,000 
0 
 
 
 
 
 
11,762,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock options outstanding (in shares)
 
 
 
 
 
 
 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 
0 
1,719,341 
2,364,722 
2,574,981 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
Award vesting period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3 years 
5 years 
 
1 year 
5 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3 years 
 
 
1 year 
 
5 years 
 
Number of shares available for grant (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,865,522 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrecognized compensation expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7,098,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average period for recognition compensation expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 years 1 month 5 days 
 
 
 
 
 
 
 
 
 
1 year 6 months 21 days 
 
 
 
 
 
 
Intrinsic value of stock options exercised
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12,493,000 
 
 
 
 
 
 
8,333,000 
2,536,000 
 
 
 
 
 
 
 
 
Stock option exercises (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
359,011 
160,230 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from stock option exercises
7,585,000 
3,194,000 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7,585,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value vested
 
 
 
 
 
 
 
 
 
4,458,000 
4,678,000 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vested (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(503,686)
(562,296)
0 
 
 
 
 
 
 
 
Range of awards
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.00% 
 
125.00% 
Performance period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 year 
 
 
 
 
 
 
Performance shares granted (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
44,476 
 
 
 
 
 
124,842 
61,600 
0 
 
 
 
 
Shares expected to be recognized
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,385,000 
 
 
 
 
 
 
Granted (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
44,476 
0 
0 
 
 
 
87,596 
63,600 
 
 
 
 
 
Granted (in USD per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 38.98 
 
 
 
 
 
$ 37.90 
$ 38.41 
 
 
 
 
 
Issuance of common stock in settlement of unit appreciation rights
 
 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 1,453,000 
 
 
 
 
 
 
Weighted average period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 years 6 months 6 days 
 
 
 
 
 
 
EQUITY-BASED COMPENSATION - Schedule of Fair Value of Stock Options (Details) (2015 Incentive Award Plan, Stock options)
12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
2015 Incentive Award Plan |
Stock options
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expected term (years)
7 years 6 months 
5 years 6 months 
7 years 6 months 
Expected volatility
44.50% 
50.70% 
35.10% 
Risk-free interest rate
2.10% 
1.50% 
1.60% 
Dividend yield
0.00% 
0.00% 
0.00% 
EQUITY-BASED COMPENSATION - Schedule of Stock Options (Details) (2015 Incentive Award Plan, USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Stock Options
 
 
 
Outstanding at beginning of period (in shares)
2,364,722 
2,574,981 
0 
Granted (in shares)
5,150 
16,931 
2,622,281 
Exercised (in shares)
(359,011)
(160,230)
0 
Forfeited (in shares)
(291,520)
(66,960)
(47,300)
Expired (in shares)
0 
0 
0 
Outstanding at end of period (in shares)
1,719,341 
2,364,722 
2,574,981 
Options vested and exercisable at end of period (in shares)
543,246 
 
 
Options expected to vest (in shares)
1,098,577 
 
 
Weighted Average Exercise Price
 
 
 
Outstanding at beginning of period (in USD per share)
$ 21.10 
$ 21.00 
$ 0.00 
Granted (in USD per share)
$ 38.91 
$ 34.74 
$ 21.00 
Exercised (in USD per share)
$ 21.13 
$ 21.00 
$ 0.00 
Forfeited (in USD per share)
$ (21.00)
$ (21.00)
$ (21.00)
Expired (in USD per share)
$ 0.00 
$ 0.00 
$ 0.00 
Outstanding at end of period (in USD per share)
$ 21.16 
$ 21.10 
$ 21.00 
Weighted average options vested and exercisable (in USD per share)
$ 21.34 
 
 
Options expected to vest (in USD per share)
$ 21.08 
 
 
Aggregate Intrinsic Value
 
 
 
Outstanding at end of period
$ 39,851 
 
 
Options exercised during period
12,493 
 
 
Options expected to vest as of December 27, 2017
25,549 
 
 
Weighted Average Remaining Contractual Life (Years)
 
 
 
Outstanding at end of period
7 years 1 month 7 days 
 
 
Options exercisable at end of year
7 years 1 month 5 days 
 
 
Options expected to vest at end of year
7 years 1 month 12 days 
 
 
Stock options
 
 
 
Stock Options
 
 
 
Nonvested beginning balance (in shares)
1,964,251 
2,574,981 
0 
Granted (in shares)
5,150 
16,931 
2,622,281 
Vested (in shares)
(503,686)
(562,296)
0 
Forfeited (in shares)
(289,620)
(65,365)
(47,300)
Nonvested ending balance (in shares)
1,176,095 
1,964,251 
2,574,981 
Weighted Average Exercise Price
 
 
 
Nonvested, beginning balance (in USD per share)
$ 8.66 
$ 8.53 
$ 0.00 
Granted (in USD per share)
$ 19.42 
$ 16.32 
$ 8.53 
Vested (in USD per share)
$ 8.85 
$ 8.32 
$ 0.00 
Forfeited (in USD per share)
$ 8.59 
$ 8.59 
$ 8.59 
Nonvested, ending balance (in USD per share)
$ 8.64 
$ 8.66 
$ 8.53 
Aggregate Intrinsic Value
 
 
 
Options exercised during period
$ 8,333 
$ 2,536 
 
EQUITY-BASED COMPENSATION - Stock Options Outstanding and Exercisable (Details) (2015 Incentive Award Plan, USD $)
12 Months Ended
Dec. 27, 2017
Twenty-One Dollars
 
Options Outstanding
 
Number Outstanding (in shares)
1,700,665 
Weighted Average Remaining Contractual Life (Years)
7 years 1 month 2 days 
Weighted Average Exercise Price (in USD per share)
$ 21.00 
Options Exercisable
 
Number Exercisable (in shares)
529,720 
Weighted Average Remaining Contractual Life (Years)
7 years 1 month 2 days 
Weighted Average Exercise Price (in USD per share)
$ 21.00 
Thirty-Four Point Sixty Two Dollars
 
Options Outstanding
 
Number Outstanding (in shares)
12,418 
Weighted Average Remaining Contractual Life (Years)
8 years 4 months 22 days 
Weighted Average Exercise Price (in USD per share)
$ 34.62 
Options Exercisable
 
Number Exercisable (in shares)
12,418 
Weighted Average Remaining Contractual Life (Years)
8 years 4 months 22 days 
Weighted Average Exercise Price (in USD per share)
$ 34.62 
Thirty-Six Point Forty One Dollars
 
Options Outstanding
 
Number Outstanding (in shares)
1,108 
Weighted Average Remaining Contractual Life (Years)
8 years 10 months 20 days 
Weighted Average Exercise Price (in USD per share)
$ 36.41 
Options Exercisable
 
Number Exercisable (in shares)
1,108 
Weighted Average Remaining Contractual Life (Years)
8 years 10 months 20 days 
Weighted Average Exercise Price (in USD per share)
$ 36.41 
Thirty-Eight Point Ninety One Dollars
 
Options Outstanding
 
Number Outstanding (in shares)
5,150 
Weighted Average Remaining Contractual Life (Years)
9 years 5 months 15 days 
Weighted Average Exercise Price (in USD per share)
$ 38.91 
Options Exercisable
 
Number Exercisable (in shares)
0 
Weighted Average Exercise Price (in USD per share)
$ 0.00 
EQUITY-BASED COMPENSATION - Summary of Performance Stock Activity (Details) (2015 Incentive Award Plan, Performance Shares, USD $)
12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
2015 Incentive Award Plan |
Performance Shares
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward]
 
 
Outstanding at beginning of period (in shares)
61,600 
0 
Granted (in shares)
87,596 
63,600 
Performance achievement (in shares)
9,545 
0 
Vested (in shares)
(22,703)
0 
Forfeited (in shares)
(11,196)
(2,000)
Expired (in shares)
0 
0 
Outstanding at end of period (in shares)
124,842 
61,600 
Stock Options
 
 
Outstanding at beginning of period (in USD per share)
$ 38.41 
$ 0.00 
Granted (in USD per share)
$ 37.90 
$ 38.41 
Performance achievement (in USD per share)
$ 38.40 
$ 0.00 
Vested (in USD per share)
$ 38.40 
$ 0.00 
Forfeited (in USD per share)
$ 38.28 
$ 38.43 
Expired (in USD per share)
$ 0.00 
$ 0.00 
Outstanding at end of period (in USD per share)
$ 38.06 
$ 38.41 
INCOME TAXES - Narrative (Details) (USD $)
0 Months Ended 1 Months Ended 12 Months Ended
Feb. 4, 2015
Dec. 27, 2017
Feb. 28, 2015
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Income Tax Contingency [Line Items]
 
 
 
 
 
 
Income tax expense related to tax cuts and jobs act
 
$ 138,636,000 
 
 
 
 
Effective income tax rate (percent)
 
 
 
94.50% 
22.30% 
51.40% 
Deferred tax assets, carryforwards, federal
 
51,668,000 
 
51,668,000 
 
 
Deferred tax assets, carryforwards, state and local
 
19,166,000 
 
19,166,000 
 
 
Number of LLC interests (shares)
 
 
 
1,376,093 
 
 
Additional deferred tax asset recognized, investment in partnership
 
 
 
14,370,000 
 
 
Reduction in basis due to amortization of deferred tax asset related to the investment in partnership [Line Items]
 
 
 
14,339,000 
 
 
Valuation allowance
 
(10,114,000)
 
(10,114,000)
(15,568,000)
 
Additional deferred tax asset recognized, tax receivable agreement
 
 
 
7,661,000 
 
 
Increase in valuation allowance
 
 
 
5,454,000 
 
 
Uncertain tax positions
 
0 
 
0 
0 
 
Percentage of tax benefits due to equity owners
 
85.00% 
 
85.00% 
 
 
Remaining percentage of tax benefits due to equity owners
 
15.00% 
 
15.00% 
 
 
Other income recognized related to reduction of tax receivable agreement liability
 
 
 
4,844,000 
0 
0 
LLC interests acquired (in shares)
5,968,841 
 
5,968,841 
1,003,585 
5,207,149 
 
Establishment of liabilities under tax receivable agreement
 
 
 
18,973,000 
100,063,000 
173,090,000 
Establishment of liabilities under tax receivable agreement
 
159,373,000 
 
159,373,000 
 
 
Current portion of liabilities under tax receivable agreement
 
937,000 
 
937,000 
4,580,000 
 
Members' Equity
 
 
 
 
 
 
Income Tax Contingency [Line Items]
 
 
 
 
 
 
Other income recognized related to reduction of tax receivable agreement liability
 
 
 
4,910,000 
 
 
Other Income |
Members' Equity
 
 
 
 
 
 
Income Tax Contingency [Line Items]
 
 
 
 
 
 
Other income recognized related to reduction of tax receivable agreement liability
 
 
 
$ 125,859,000 
 
 
INCOME TAXES - Schedule of Components of Income before Income Taxes (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Income Tax Disclosure [Abstract]
 
 
 
Domestic
$ 152,204 
$ 20,623 
$ 244 
Foreign
8,089 
7,873 
6,184 
Income before income taxes
$ 160,293 
$ 28,496 
$ 6,428 
INCOME TAXES - Schedule of Components of Income Tax Expense (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Current income taxes:
 
 
 
Federal
$ 518 
$ 3,767 
$ 2,474 
State and local
3,615 
2,439 
1,131 
Foreign
942 
667 
433 
Total current income taxes
5,075 
6,873 
4,038 
Deferred income taxes:
 
 
 
Federal
145,139 
(48)
(267)
State and local
1,195 
(475)
(467)
Total deferred income taxes
146,334 
(523)
(734)
Income tax expense
$ 151,409 
$ 6,350 
$ 3,304 
INCOME TAXES - Reconciliation of Income Tax Expense (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Income Tax Disclosure [Abstract]
 
 
 
Income taxes at U.S. federal statutory rate
$ 56,103 
$ 9,689 
$ 2,186 
U.S. federal statutory income tax rate, percentage
35.00% 
34.00% 
34.00% 
State and local income taxes, net of federal benefit
2,590 
1,461 
663 
State and local income taxes, net of federal benefit, percentage
1.60% 
5.10% 
10.30% 
Foreign withholding taxes
942 
667 
433 
Foreign withholding taxes, percentage
0.60% 
2.30% 
6.70% 
Non-deductible expenses
223 
25 
653 
Non-deductible expenses, percentage
0.10% 
0.10% 
10.20% 
Tax credits
(1,230)
(779)
(141)
Tax credits, percentage
(0.80%)
(2.70%)
(2.20%)
Non-controlling interest
(3,273)
(3,765)
(490)
Non-controlling interest, percentage
(2.00%)
(13.20%)
(7.60%)
Remeasurement of deferred tax assets in connection with the enactment of the TCJA
138,636 
0 
0 
Remeasurement of deferred tax assets in connection with the enactment of the TCJA, percentage
86.50% 
0.00% 
0.00% 
Remeasurement of deferred tax assets in connection with other tax rate changes
1,657 
(1,353)
0 
Remeasurement of deferred tax assets in connection with other tax rate changes, percentage
1.00% 
(4.70%)
0.00% 
Remeasurement of liabilities under tax receivable agreement in connection with the enactment of the TCJA
(44,051)
0 
0 
Remeasurement of tax receivable agreement liability in connection with the enactment of the TCJA, percentage
(27.40%)
0.00% 
0.00% 
Other
(188)
405 
0 
Other, percentage
(0.10%)
1.40% 
0.00% 
Income tax expense
$ 151,409 
$ 6,350 
$ 3,304 
Effective income tax rate, percentage
94.50% 
22.30% 
51.40% 
INCOME TAXES- Schedule of Deferred Tax Assets and Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 27, 2017
Dec. 28, 2016
Deferred tax assets:
 
 
Investment in partnership
$ 137,449 
$ 209,648 
Tax Receivable Agreement
43,464 
110,022 
Deferred rent
571 
561 
Deferred revenue
59 
53 
Stock-based compensation
322 
331 
Net operating loss carryforwards
12,332 
7,338 
Tax credits
2,328 
1,084 
Other assets
176 
108 
Total gross deferred tax assets
196,701 
329,145 
Valuation allowance
(10,114)
(15,568)
Total deferred tax assets, net of valuation allowance
186,587 
313,577 
Deferred tax liabilities:
 
 
Property and equipment
(673)
(370)
Total gross deferred tax liabilities
(673)
(370)
Net deferred tax assets
$ 185,914 
$ 313,207 
EARNINGS PER SHARE - Narrative (Details) (Common stock, Class A Common Stock)
0 Months Ended 12 Months Ended
Feb. 4, 2015
Dec. 30, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Shares issued during the period (in shares)
5,968,841 
5,750,000 
Issuance of class A common stock in settlement of unit appreciation rights (in shares)
 
339,306 
IPO
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Shares issued during the period (in shares)
5,750,000 
 
EARNINGS PER SHARE - Schedule of Earnings Per Share (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 27, 2017
Sep. 27, 2017
Jun. 28, 2017
Mar. 29, 2017
Dec. 28, 2016
Sep. 28, 2016
Jun. 29, 2016
Mar. 30, 2016
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Net income
$ (11,032)
$ 7,870 
$ 8,184 
$ 3,862 
$ 5,457 
$ 6,789 
$ 6,549 
$ 3,351 
$ 8,884 
$ 22,146 
$ 3,124 
Less: net income attributable to non-controlling interests
 
 
 
 
 
 
 
 
9,204 
9,700 
11,900 
Net income (loss) attributable to Shake Shack Inc.
$ (12,463)
$ 4,997 
$ 4,879 
$ 2,267 
$ 3,920 
$ 3,766 
$ 3,298 
$ 1,462 
$ (320)
$ 12,446 
$ (8,776)
Denominator:
 
 
 
 
 
 
 
 
 
 
 
Weighted-average shares of Class A common stock outstanding—basic (shares)
 
 
 
 
 
 
 
 
25,876 
22,956 
13,588 
Effect of dilutive securities:
 
 
 
 
 
 
 
 
 
 
 
Weighted-average shares of Class A common stock outstanding—diluted (shares)
 
 
 
 
 
 
 
 
25,876 
23,449 
13,588 
Earnings per share of Class A common stock—basic (in dollars per share)
 
 
 
 
 
 
 
 
$ (0.01)
$ 0.54 
$ (0.65)
Earnings per share of Class A common stock—diluted (in dollars per share)
 
 
 
 
 
 
 
 
$ (0.01)
$ 0.53 
$ (0.65)
Stock options
 
 
 
 
 
 
 
 
 
 
 
Effect of dilutive securities:
 
 
 
 
 
 
 
 
 
 
 
Restricted Class B units (shares)
 
 
 
 
 
 
 
 
0 
493 
0 
EARNINGS PER SHARE - Antidilutive Securities (Details) (Details)
12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Stock options
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Antidilutive shares (in shares)
1,719,341 
125 
2,574,981 
Performance Shares
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Antidilutive shares (in shares)
124,842 
26,860 
0 
Restricted Stock Units
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Antidilutive shares (in shares)
44,476 
0 
0 
Class B Common Stock
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Antidilutive shares (in shares)
10,250,007 
11,253,592 
16,460,741 
SUPPLEMENTAL CASH FLOW INFORMATION (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Cash paid for:
 
 
 
Income taxes, net of refunds
$ 2,261 
$ 1,823 
$ 416 
Interest, net of amounts capitalized
1,106 
54 
92 
Non-cash investing activities:
 
 
 
Accrued purchases of property and equipment
7,526 
6,150 
4,904 
Capitalized landlord assets for leases where we are deemed the accounting owner
10,125 
1,985 
0 
Capitalized equity-based compensation
109 
139 
0 
Non-cash financing activities:
 
 
 
Establishment of liabilities under tax receivable agreement
18,973 
100,063 
173,090 
Accrued distributions payable to non-controlling interest holders
0 
607 
0 
IPO And Organizational Transaction |
Class A Common Stock
 
 
 
Non-cash investing activities:
 
 
 
Class A common stock issued
0 
0 
6 
Secondary Offering and Redemption of Units |
Class A Common Stock
 
 
 
Non-cash investing activities:
 
 
 
Class A common stock issued
1 
5 
6 
Secondary Offering and Redemption of Units |
Class B Common Stock
 
 
 
Non-cash financing activities:
 
 
 
Cancellation of Class B common stock
(1)
(5)
(6)
USC Merger |
Class A Common Stock
 
 
 
Non-cash investing activities:
 
 
 
Class A common stock issued
0 
0 
2 
USC Merger |
Class B Common Stock
 
 
 
Non-cash financing activities:
 
 
 
Cancellation of Class B common stock
0 
0 
(2)
Parent Company |
IPO And Organizational Transaction |
Class A Common Stock
 
 
 
Non-cash investing activities:
 
 
 
Class A common stock issued
0 
0 
6 
Parent Company |
IPO And Organizational Transaction |
Class B Common Stock
 
 
 
Non-cash financing activities:
 
 
 
Cancellation of Class B common stock
0 
0 
(6)
Parent Company |
Secondary Offering and Redemption of Units |
Class A Common Stock
 
 
 
Non-cash investing activities:
 
 
 
Class A common stock issued
4,415 
18,944 
19,933 
Parent Company |
Secondary Offering and Redemption of Units |
Class B Common Stock
 
 
 
Non-cash financing activities:
 
 
 
Cancellation of Class B common stock
(1)
(5)
(6)
Parent Company |
USC Merger |
Class A Common Stock
 
 
 
Non-cash investing activities:
 
 
 
Class A common stock issued
0 
0 
2 
Parent Company |
USC Merger |
Class B Common Stock
 
 
 
Non-cash financing activities:
 
 
 
Cancellation of Class B common stock
$ 0 
$ 0 
$ (2)
COMMITMENTS AND CONTINGENCIES (Details) (USD $)
0 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended
May 1, 2017
Dec. 27, 2017
Dec. 27, 2017
Letter of credit
Dec. 27, 2017
Retail site
Dec. 31, 2013
Office building
Sep. 27, 2017
Home Office Lease
Nov. 30, 2015
Former Shake Shack Manager Litigation
manager
Dec. 27, 2017
Former Shake Shack Manager Litigation
Dec. 27, 2017
IPO
Loss Contingencies [Line Items]
 
 
 
 
 
 
 
 
 
Letters of credit outstanding
 
 
 
$ 160,000 
$ 80,000 
$ 603,000 
 
 
 
Renewal term
 
 
1 year 
 
 
 
 
 
 
Number of former Shake Shack managers
 
 
 
 
 
 
2 
 
 
Settlement agreement amount funded
 
 
 
 
 
 
 
750,000 
 
Litigation settlement, expense
774,000 
 
 
 
 
 
 
 
 
Percentage of tax benefits due to equity owners
 
85.00% 
 
 
 
 
 
 
85.00% 
Establishment of tax receivable agreement liability
 
$ 159,373,000 
 
 
 
 
 
 
 
RELATED PARTY TRANSACTIONS (Details) (USD $)
0 Months Ended 12 Months Ended
Feb. 4, 2015
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Related Party Transaction [Line Items]
 
 
 
 
Expenses from transactions with related party
 
$ 0 
 
 
Percentage of tax benefits due to equity owners
 
85.00% 
 
 
Tax receivable agreement amount paid
 
4,844,000 
0 
0 
Establishment of liabilities under tax receivable agreement
 
159,373,000 
 
 
Payments to noncontrolling interests
 
2,379,000 
1,745,000 
0 
Member distributions
 
0 
 
(11,125,000)
Distributions to noncontrolling interests payable
 
 
607,000 
 
Daily Provisions
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
Expenses from transactions with related party
 
6,000 
0 
 
Share Our Strength
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
Expenses from transactions with related party
 
20,000 
 
 
Affiliated Entity
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
General and administrative expenses
 
7,000 
10,000 
157,000 
Expenses from transactions with related party
 
0 
1,000 
 
Due from related parties, current
 
0 
0 
 
Charitable campaign flow through
 
633,000 
587,000 
504,000 
Affiliated Entity |
Self insurance health care expense
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
Expenses from transactions with related party
 
0 
0 
146,000 
Hudson Yards Sports and Entertainment |
Concession income
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
Expenses from transactions with related party
 
452,000 
309,000 
282,000 
Due from related parties, current
 
18,000 
11,000 
 
Number of renewal terms
 
5 
 
 
Renewal option period
 
5 years 
 
 
Madison Square Park Conservancy |
Rent Expense
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
Expenses from transactions with related party
 
907,000 
1,062,000 
692,000 
Due from MSP conservancy
 
 
1,000 
 
Madison Square Park Conservancy |
Tenant Improvement Allowance
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
Due from MSP conservancy
 
0 
200,000 
 
Other revenues
 
200,000 
0 
0 
Madison Square Park Conservancy |
Share Our Strength
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
Expenses from transactions with related party
 
148,000 
117,000 
109,000 
Board of Directors Chairman |
Mobo Systems, Inc.
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
Expenses from transactions with related party
 
80,000 
0 
8,000 
Due from MSP conservancy
 
0 
0 
 
Board of Directors Chairman |
Square, Inc
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
Expenses from transactions with related party
 
33,000 
 
 
Due from MSP conservancy
 
0 
0 
 
Parent Company
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
Percentage of tax benefits due to equity owners
 
85.00% 
 
 
Tax receivable agreement amount paid
 
4,844,000 
0 
0 
Establishment of liabilities under tax receivable agreement
 
159,373,000 
272,482,000 
 
Non- Controlling Interest
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
Tax receivable agreement amount paid
 
4,910,000 
 
 
Members' Equity
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
Tax receivable agreement amount paid
 
4,910,000 
 
 
Payments to noncontrolling interests
 
2,379,000 
1,745,000 
 
Member distributions
$ (11,125,000)
 
 
$ (11,125,000)
GEOGRAPHIC INFORMATION (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 27, 2017
Sep. 27, 2017
Jun. 28, 2017
Mar. 29, 2017
Dec. 28, 2016
Sep. 28, 2016
Jun. 29, 2016
Mar. 30, 2016
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total revenue
$ 96,136 
$ 94,609 
$ 91,316 
$ 76,749 
$ 73,271 
$ 74,567 
$ 66,472 
$ 54,165 
$ 358,810 
$ 268,475 
$ 190,592 
United States
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
 
 
 
 
 
 
 
348,575 
260,602 
184,408 
Other countries
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
 
 
 
 
 
 
 
$ 10,235 
$ 7,873 
$ 6,184 
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 27, 2017
Sep. 27, 2017
Jun. 28, 2017
Mar. 29, 2017
Dec. 28, 2016
Sep. 28, 2016
Jun. 29, 2016
Mar. 30, 2016
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Quarterly Financial Information Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Total revenue
$ 96,136 
$ 94,609 
$ 91,316 
$ 76,749 
$ 73,271 
$ 74,567 
$ 66,472 
$ 54,165 
$ 358,810 
$ 268,475 
$ 190,592 
Operating income
5,838 
10,610 
11,737 
5,628 
4,988 
9,170 
8,933 
4,714 
33,813 
27,805 
6,753 
Net income
(11,032)
7,870 
8,184 
3,862 
5,457 
6,789 
6,549 
3,351 
8,884 
22,146 
3,124 
Net income attributable to Shake Shack Inc.
$ (12,463)
$ 4,997 
$ 4,879 
$ 2,267 
$ 3,920 
$ 3,766 
$ 3,298 
$ 1,462 
$ (320)
$ 12,446 
$ (8,776)
Earnings (loss) per share
 
 
 
 
 
 
 
 
 
 
 
Basic (in dollars per share)
$ (0.47)
$ 0.19 
$ 0.19 
$ 0.09 
$ 0.16 
$ 0.16 
$ 0.15 
$ 0.07 
 
 
 
Diluted (in dollars per share)
$ (0.47)
$ 0.19 
$ 0.19 
$ 0.09 
$ 0.15 
$ 0.15 
$ 0.14 
$ 0.07 
 
 
 
SCHEDULE I: CONDENSED FINANCIAL INFORMATION OF REGISTRANT - BALANCE SHEET (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Feb. 4, 2015
Dec. 31, 2014
Preferred stock, par value (in dollars per share)
$ 0 
$ 0 
 
 
 
Current assets:
 
 
 
 
 
Accounts receivable
$ 5,641 
$ 6,006 
 
 
 
Total current assets
93,199 
83,944 
 
 
 
Deferred income taxes, net
185,914 
313,207 
 
 
 
TOTAL ASSETS
470,606 
538,194 
 
 
 
Current liabilities:
 
 
 
 
 
Accrued expenses
11,649 
8,538 
 
 
 
Current portion of liabilities under tax receivable agreement
937 
4,580 
 
 
 
Total current liabilities
34,024 
31,716 
 
 
 
Liabilities under tax receivable agreement, net of current portion
158,436 
267,902 
 
 
 
Total liabilities
246,127 
336,841 
 
 
 
Commitments and contingencies
   
   
 
 
 
Stockholders' equity:
 
 
 
 
 
Preferred stock, no par value—10,000,000 shares authorized; none issued and outstanding as of December 27, 2017 and December 28, 2016, respectively.
0 
0 
 
 
 
Additional paid-in capital
153,105 
135,448 
 
 
 
Retained earnings
16,399 
16,719 
 
 
 
Accumulated other comprehensive loss
(49)
(15)
 
 
 
Total stockholders' equity
224,479 
201,353 
157,019 
 
12,600 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
470,606 
538,194 
 
 
 
Preferred stock, shares authorized (in shares)
10,000,000 
10,000,000 
 
10,000,000 
 
Preferred stock, shares issued (in shares)
0 
0 
 
 
 
Preferred stock, shares outstanding (in shares)
0 
0 
 
 
 
Class A Common Stock
 
 
 
 
 
Stockholders' equity:
 
 
 
 
 
Common stock
27 
25 
 
 
 
Common stock par value (in dollars per share)
$ 0.001 
$ 0.001 
 
$ 0.001 
 
Common stock, shares authorized (in shares)
200,000,000 
200,000,000 
 
200,000,000 
 
Common stock, shares, issued (in shares)
26,527,477 
25,151,384 
 
 
 
Common stock, shares, outstanding (in shares)
26,527,477 
25,151,384 
 
 
 
Class B Common Stock
 
 
 
 
 
Stockholders' equity:
 
 
 
 
 
Common stock
10 
11 
 
 
 
Common stock par value (in dollars per share)
$ 0.001 
$ 0.001 
 
$ 0.001 
 
Common stock, shares authorized (in shares)
35,000,000 
35,000,000 
 
35,000,000 
 
Common stock, shares, issued (in shares)
10,250,007 
11,253,592 
 
 
 
Common stock, shares, outstanding (in shares)
10,250,007 
11,253,592 
 
 
 
Parent Company
 
 
 
 
 
Preferred stock, par value (in dollars per share)
$ 0 
$ 0 
 
 
 
Current assets:
 
 
 
 
 
Cash
4,988 
3,785 
 
 
 
Accounts receivable
0 
2 
 
 
 
Prepaid expenses
100 
105 
 
 
 
Total current assets
5,088 
3,892 
 
 
 
Deferred income taxes, net
185,750 
312,802 
 
 
 
Investment in subsidiaries
142,314 
109,680 
 
 
 
TOTAL ASSETS
333,152 
426,374 
 
 
 
Current liabilities:
 
 
 
 
 
Accrued expenses
70 
49 
 
 
 
Due to SSE Holdings
4,217 
1,655 
 
 
 
Current portion of liabilities under tax receivable agreement
937 
4,580 
 
 
 
Total current liabilities
5,224 
6,284 
 
 
 
Liabilities under tax receivable agreement, net of current portion
158,436 
267,902 
 
 
 
Total liabilities
163,660 
274,186 
 
 
 
Commitments and contingencies
   
   
 
 
 
Stockholders' equity:
 
 
 
 
 
Preferred stock, no par value—10,000,000 shares authorized; none issued and outstanding as of December 27, 2017 and December 28, 2016, respectively.
0 
0 
 
 
 
Additional paid-in capital
153,105 
135,448 
 
 
 
Retained earnings
16,399 
16,719 
 
 
 
Accumulated other comprehensive loss
(49)
(15)
 
 
 
Total stockholders' equity
169,492 
152,188 
 
 
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
333,152 
426,374 
 
 
 
Preferred stock, shares authorized (in shares)
10,000,000 
10,000,000 
 
 
 
Preferred stock, shares issued (in shares)
0 
0 
 
 
 
Preferred stock, shares outstanding (in shares)
0 
0 
 
 
 
Parent Company |
Class A Common Stock
 
 
 
 
 
Stockholders' equity:
 
 
 
 
 
Common stock
27 
25 
 
 
 
Common stock par value (in dollars per share)
$ 0.001 
$ 0.001 
 
 
 
Common stock, shares authorized (in shares)
200,000,000 
200,000,000 
 
 
 
Common stock, shares, issued (in shares)
26,527,477 
25,151,384 
 
 
 
Common stock, shares, outstanding (in shares)
26,527,477 
25,151,384 
 
 
 
Parent Company |
Class B Common Stock
 
 
 
 
 
Stockholders' equity:
 
 
 
 
 
Common stock
$ 10 
$ 11 
 
 
 
Common stock par value (in dollars per share)
$ 0.001 
$ 0.001 
 
 
 
Common stock, shares authorized (in shares)
35,000,000 
35,000,000 
 
 
 
Common stock, shares, issued (in shares)
10,250,007 
11,253,592 
 
 
 
Common stock, shares, outstanding (in shares)
10,250,007 
11,253,592 
 
 
 
SCHEDULE I: CONDENSED FINANCIAL INFORMATION OF REGISTRANT - STATEMENTS OF INCOME (LOSS) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 27, 2017
Sep. 27, 2017
Jun. 28, 2017
Mar. 29, 2017
Dec. 28, 2016
Sep. 28, 2016
Jun. 29, 2016
Mar. 30, 2016
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Condensed Income Statements, Captions [Line Items]
 
 
 
 
 
 
 
 
 
 
 
TOTAL REVENUE
$ 96,136 
$ 94,609 
$ 91,316 
$ 76,749 
$ 73,271 
$ 74,567 
$ 66,472 
$ 54,165 
$ 358,810 
$ 268,475 
$ 190,592 
General and administrative expenses
 
 
 
 
 
 
 
 
39,003 
30,556 
37,825 
TOTAL EXPENSES
 
 
 
 
 
 
 
 
324,997 
240,670 
183,839 
OPERATING INCOME
5,838 
10,610 
11,737 
5,628 
4,988 
9,170 
8,933 
4,714 
33,813 
27,805 
6,753 
Other income
 
 
 
 
 
 
 
 
127,221 
688 
0 
Interest expense
 
 
 
 
 
 
 
 
(1,643)
(374)
(332)
INCOME BEFORE INCOME TAXES
 
 
 
 
 
 
 
 
160,293 
28,496 
6,428 
Income tax expense
 
 
 
 
 
 
 
 
151,409 
6,350 
3,304 
NET INCOME
(11,032)
7,870 
8,184 
3,862 
5,457 
6,789 
6,549 
3,351 
8,884 
22,146 
3,124 
Parent Company
 
 
 
 
 
 
 
 
 
 
 
Condensed Income Statements, Captions [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Intercompany revenue
 
 
 
 
 
 
 
 
1,466 
1,603 
1,336 
TOTAL REVENUE
 
 
 
 
 
 
 
 
1,466 
1,603 
1,336 
General and administrative expenses
 
 
 
 
 
 
 
 
1,692 
1,603 
1,336 
TOTAL EXPENSES
 
 
 
 
 
 
 
 
1,692 
1,603 
1,336 
OPERATING INCOME
 
 
 
 
 
 
 
 
(226)
0 
0 
Equity in net income of subsidiaries
 
 
 
 
 
 
 
 
22,090 
16,982 
6,906 
Other income
 
 
 
 
 
 
 
 
127,221 
688 
0 
Interest expense
 
 
 
 
 
 
 
 
(50)
(16)
0 
INCOME BEFORE INCOME TAXES
 
 
 
 
 
 
 
 
149,035 
17,654 
6,906 
Income tax expense
 
 
 
 
 
 
 
 
149,355 
5,208 
2,633 
NET INCOME
 
 
 
 
 
 
 
 
$ (320)
$ 12,446 
$ 4,273 
SCHEDULE I: CONDENSED FINANCIAL INFORMATION OF REGISTRANT - STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 27, 2017
Sep. 27, 2017
Jun. 28, 2017
Mar. 29, 2017
Dec. 28, 2016
Sep. 28, 2016
Jun. 29, 2016
Mar. 30, 2016
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Condensed Statement of Income Captions [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Net income
$ (11,032,000)
$ 7,870,000 
$ 8,184,000 
$ 3,862,000 
$ 5,457,000 
$ 6,789,000 
$ 6,549,000 
$ 3,351,000 
$ 8,884,000 
$ 22,146,000 
$ 3,124,000 
Available-for-sale Securities:
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized holding (losses)
 
 
 
 
 
 
 
 
(94,000)1
(35,000)1
(11,000)1
Less: reclassification adjustments for net realized losses included in net income
 
 
 
 
 
 
 
 
47,000 1
19,000 1
0 1
OTHER COMPREHENSIVE LOSS, NET OF TAX
 
 
 
 
 
 
 
 
(47,000)
(16,000)
(11,000)
COMPREHENSIVE INCOME
 
 
 
 
 
 
 
 
8,837,000 
22,130,000 
3,113,000 
Income tax benefit
 
 
 
 
 
 
 
 
0 
0 
0 
Parent Company
 
 
 
 
 
 
 
 
 
 
 
Condensed Statement of Income Captions [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Net income
 
 
 
 
 
 
 
 
(320,000)
12,446,000 
4,273,000 
Available-for-sale Securities:
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized holding (losses)
 
 
 
 
 
 
 
 
(67,000)1
(22,000)1
(5,000)1
Less: reclassification adjustments for net realized losses included in net income
 
 
 
 
 
 
 
 
33,000 1
12,000 1
0 1
OTHER COMPREHENSIVE LOSS, NET OF TAX
 
 
 
 
 
 
 
 
(34,000)1
(10,000)1
(5,000)1
COMPREHENSIVE INCOME
 
 
 
 
 
 
 
 
(354,000)
12,436,000 
4,268,000 
Income tax benefit
 
 
 
 
 
 
 
 
 
$ 0 
$ 0 
SCHEDULE I: CONDENSED FINANCIAL INFORMATION OF REGISTRANT - STATEMENTS OF CASH FLOWS (Details) (USD $)
12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
OPERATING ACTIVITIES
 
 
 
Net income
$ 8,884,000 
$ 22,146,000 
$ 3,124,000 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
 
 
 
Equity-based compensation
5,623,000 
5,354,000 
16,681,000 
Deferred income taxes
146,334,000 
(523,000)
(734,000)
Other non-cash income
(127,221,000)
(688,000)
0 
Changes in operating assets and liabilities:
 
 
 
Accounts receivable
6,421,000 
2,974,000 
775,000 
Prepaid expenses and other current assets
2,244,000 
(756,000)
(958,000)
Accrued expenses
4,388,000 
5,560,000 
2,548,000 
Other current liabilities
(988,000)
2,130,000 
257,000 
NET CASH PROVIDED BY OPERATING ACTIVITIES
70,878,000 
54,285,000 
41,258,000 
INVESTING ACTIVITIES
 
 
 
NET CASH USED IN INVESTING ACTIVITIES
(61,943,000)
(114,761,000)
(34,514,000)
FINANCING ACTIVITIES
 
 
 
Proceeds from issuance of Class A common stock sold in initial public offering, net of underwriting discounts and commissions
0 
0 
109,262,000 
Proceeds from issuance of Class B common stock
0 
0 
30,000 
Proceeds from stock option exercises
7,585,000 
3,194,000 
0 
Payments under tax receivable agreement
(4,844,000)
0 
0 
NET CASH PROVIDED BY FINANCING ACTIVITIES
965,000 
1,234,000 
61,428,000 
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
9,900,000 
(59,242,000)
68,172,000 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
11,607,000 
70,849,000 
2,677,000 
CASH AND CASH EQUIVALENTS AT END OF PERIOD
21,507,000 
11,607,000 
70,849,000 
Parent Company
 
 
 
OPERATING ACTIVITIES
 
 
 
Net income
(320,000)
12,446,000 
4,273,000 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
 
 
 
Equity in net income of subsidiaries
(22,090,000)
(16,982,000)
(6,906,000)
Equity-based compensation
234,000 
189,000 
330,000 
Non-cash reimbursement revenue treated as investment
0 
(189,000)
0 
Deferred income taxes
146,095,000 
(462,000)
(551,000)
Other non-cash income
(127,221,000)
(688,000)
0 
Changes in operating assets and liabilities:
 
 
 
Accounts receivable
2,000 
(2,000)
0 
Prepaid expenses and other current assets
5,000 
(1,000)
0 
Due to/from SSE Holdings
(5,339,000)
214,000 
4,000 
Accrued expenses
21,000 
(11,000)
58,000 
Other current liabilities
(17,000)
17,000 
0 
Income taxes payable
2,990,000 
5,023,000 
3,184,000 
NET CASH PROVIDED BY OPERATING ACTIVITIES
(5,640,000)
(446,000)
392,000 
INVESTING ACTIVITIES
 
 
 
Purchases of LLC Interests from SSE Holdings
(5,522,000)
(4,559,000)
(112,298,000)
Return of investment in SSE Holdings
4,101,000 
2,694,000 
0 
NET CASH USED IN INVESTING ACTIVITIES
(1,421,000)
(1,865,000)
(112,298,000)
FINANCING ACTIVITIES
 
 
 
Proceeds from issuance of Class A common stock sold in initial public offering, net of underwriting discounts and commissions
0 
0 
112,298,000 
Proceeds from issuance of Class A common stock to SSE Holdings upon settlement of stock option exercises
5,522,000 
2,489,000 
0 
Proceeds from issuance of Class B common stock
0 
0 
30,000 
Proceeds from stock option exercises
7,586,000 
3,185,000 
0 
Payments under tax receivable agreement
(4,844,000)
0 
0 
NET CASH PROVIDED BY FINANCING ACTIVITIES
8,264,000 
5,674,000 
112,328,000 
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
1,203,000 
3,363,000 
422,000 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
3,785,000 
422,000 
0 
CASH AND CASH EQUIVALENTS AT END OF PERIOD
$ 4,988,000 
$ 3,785,000 
$ 422,000 
SCHEDULE I: CONDENSED FINANCIAL INFORMATION OF REGISTRANT - NOTES TO FINANCIAL STATEMENTS (Details) (USD $)
12 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 1 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Dec. 27, 2017
IPO
Dec. 27, 2017
Class A Common Stock
USC Merger
Dec. 28, 2016
Class A Common Stock
USC Merger
Dec. 30, 2015
Class A Common Stock
USC Merger
Dec. 27, 2017
Class A Common Stock
Secondary Offering and Redemption of Units
Dec. 28, 2016
Class A Common Stock
Secondary Offering and Redemption of Units
Dec. 30, 2015
Class A Common Stock
Secondary Offering and Redemption of Units
Dec. 27, 2017
Class A Common Stock
IPO And Organizational Transaction
Dec. 28, 2016
Class A Common Stock
IPO And Organizational Transaction
Dec. 30, 2015
Class A Common Stock
IPO And Organizational Transaction
Feb. 4, 2015
Class A Common Stock
Common stock
Dec. 30, 2015
Class A Common Stock
Common stock
Feb. 4, 2015
Class A Common Stock
Common stock
IPO
Feb. 4, 2015
Class A Common Stock
Common stock
IPO
Feb. 4, 2015
Class A Common Stock
Common stock
Over-allotment option
Dec. 30, 2015
Class A Common Stock
Common stock
USC Merger
Dec. 27, 2017
Class B Common Stock
USC Merger
Dec. 28, 2016
Class B Common Stock
USC Merger
Dec. 30, 2015
Class B Common Stock
USC Merger
Dec. 27, 2017
Class B Common Stock
Secondary Offering and Redemption of Units
Dec. 28, 2016
Class B Common Stock
Secondary Offering and Redemption of Units
Dec. 30, 2015
Class B Common Stock
Secondary Offering and Redemption of Units
Feb. 4, 2015
Class B Common Stock
Common stock
Dec. 27, 2017
Parent Company
Dec. 28, 2016
Parent Company
Dec. 30, 2015
Parent Company
Dec. 27, 2017
Parent Company
Class A Common Stock
USC Merger
Dec. 28, 2016
Parent Company
Class A Common Stock
USC Merger
Dec. 30, 2015
Parent Company
Class A Common Stock
USC Merger
Dec. 27, 2017
Parent Company
Class A Common Stock
Secondary Offering and Redemption of Units
Dec. 28, 2016
Parent Company
Class A Common Stock
Secondary Offering and Redemption of Units
Dec. 30, 2015
Parent Company
Class A Common Stock
Secondary Offering and Redemption of Units
Dec. 27, 2017
Parent Company
Class A Common Stock
IPO And Organizational Transaction
Dec. 28, 2016
Parent Company
Class A Common Stock
IPO And Organizational Transaction
Dec. 30, 2015
Parent Company
Class A Common Stock
IPO And Organizational Transaction
Feb. 4, 2015
Parent Company
Class A Common Stock
Common stock
IPO
Feb. 4, 2015
Parent Company
Class A Common Stock
Common stock
IPO
Feb. 4, 2015
Parent Company
Class A Common Stock
Common stock
Over-allotment option
Dec. 27, 2017
Parent Company
Class B Common Stock
USC Merger
Dec. 28, 2016
Parent Company
Class B Common Stock
USC Merger
Dec. 30, 2015
Parent Company
Class B Common Stock
USC Merger
Dec. 27, 2017
Parent Company
Class B Common Stock
Secondary Offering and Redemption of Units
Dec. 28, 2016
Parent Company
Class B Common Stock
Secondary Offering and Redemption of Units
Dec. 30, 2015
Parent Company
Class B Common Stock
Secondary Offering and Redemption of Units
Dec. 27, 2017
Parent Company
Class B Common Stock
IPO And Organizational Transaction
Dec. 28, 2016
Parent Company
Class B Common Stock
IPO And Organizational Transaction
Dec. 30, 2015
Parent Company
Class B Common Stock
IPO And Organizational Transaction
Dec. 27, 2017
Consolidation, Eliminations
Parent Company
Dec. 28, 2016
Consolidation, Eliminations
Parent Company
Dec. 30, 2015
Consolidation, Eliminations
Parent Company
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares issued during the period (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
5,968,841 
5,750,000 
5,750,000 
 
750,000 
1,727,804 
 
 
 
 
 
 
30,160,694 
 
 
 
 
 
 
 
 
 
 
 
 
5,750,000 
 
750,000 
 
 
 
 
 
 
 
 
 
 
 
 
Shares issued, share price (in dollars per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 21 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 21.000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds of issuance of initial public offering net of underwriting discounts and commissions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 112,298,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 112,298,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Due to SSE Holdings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,217,000 
1,655,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Intercompany revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,466,000 
1,603,000 
1,336,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,466,000 
1,603,000 
 
Equity in net income of subsidiaries
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22,090,000 
16,982,000 
6,906,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22,090,000 
 
 
Percentage of tax benefits due to equity owners
85.00% 
 
 
85.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
85.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payments under tax receivable agreement
(4,844,000)
0 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(4,844,000)
0 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash paid for:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income taxes
2,261,000 
1,823,000 
416,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
253,000 
576,000 
0 
Interest
1,106,000 
54,000 
92,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,000 
0 
0 
Non-cash investing activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accrued contribution related to stock option exercises
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7,586,000 
1,116,000 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Class A common stock issued
 
 
 
 
0 
0 
2,000 
1,000 
5,000 
6,000 
0 
0 
6,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 
0 
2,000 
4,415,000 
18,944,000 
19,933,000 
0 
0 
6,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-cash contribution made in connection with equity awards granted to employees of SSE Holdings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,497,000 
5,304,000 
2,355,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-cash financing activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cancellation of Class B common stock
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 
0 
(2,000)
(1,000)
(5,000)
(6,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 
0 
(2,000)
(1,000)
(5,000)
(6,000)
0 
0 
(6,000)
 
 
 
Establishment of liabilities under tax receivable agreement
$ 159,373,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 159,373,000 
$ 272,482,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 18,973,000 
$ 100,063,000 
$ 173,090,000 
SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS (Details) (Deferred tax asset valuation allowance, USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 27, 2017
Dec. 28, 2016
Dec. 30, 2015
Dec. 31, 2014
Deferred tax asset valuation allowance
 
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
 
Balance at beginning of period
$ 15,568 
$ 23,155 
$ 0 
$ 0 
Charged to costs and expenses
0 
90 
0 
0 
Charged to other accounts
3,455 
1,965 
39,700 
0 
Reductions
(8,909)
9,642 
16,545 
0 
Balance at end of period
10,114 
15,568 
23,155 
0 
Reductions related to revaluation of tax reform
$ (4,780)