EARNINGS PER SHARE

9 Months Ended

Sep. 27, 2017

Basic earnings per share of Class A common stock is computed by dividing net income available to Shake Shack Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income available to Shake Shack Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities.

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock for the thirteen and thirty-nine weeks ended September 27, 2017 and September 28, 2016.



			Thirteen Weeks Ended				Thirty-Nine Weeks Ended
			September 27 2017		September 28 2016		September 27 2017		September 28 2016
Numerator:
	Net income		$	7,870	$	6,789	$	19,916	$	16,689
	Less: net income attributable to non-controlling interests		2,873		3,023		7,773		8,163
	Net income attributable to Shake Shack Inc.		$	4,997	$	3,766	$	12,143	$	8,526
Denominator:
	Weighted-average shares of Class A common stock outstanding—basic		26,024		24,023		25,733		22,310
	Effect of dilutive securities:
		Stock options	411		531		486		495
		Performance stock units	26		—		24		—
		Restricted stock units	16		—		5		—
	Weighted-average shares of Class A common stock outstanding—diluted		26,477		24,554		26,248		22,805

Earnings per share of Class A common stock—basic			$	0.19	$	0.16	$	0.47	$	0.38
Earnings per share of Class A common stock—diluted			$	0.19	$	0.15	$	0.46	$	0.37

Shares of our Class B common stock do not share in the earnings or losses of Shake Shack and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented.

The following table presents potentially dilutive securities excluded from the computations of diluted earnings per share of Class A common stock for the thirteen and thirty-nine weeks ended September 27, 2017 and September 28, 2016.



	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	September 27 2017		September 28 2016		September 27 2017		September 28 2016
Stock options⁽¹⁾	18,676	(2)	—		18,676	(2)	—
Performance stock units⁽¹⁾	86,396	(3)	62,800	(3)	86,396	(3)	62,800	(3)
Shares of Class B common stock	10,567,792	(4)	11,754,078	(4)	10,567,792	(4)	11,754,078	(4)


(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 performance conditions associated with these awards were not met assuming the end of the reporting period was the end of the performance period.

(4)

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.