XML 61 R30.htm IDEA: XBRL DOCUMENT v3.10.0.1

SCHEDULE I: CONDENSED FINANCIAL INFORMATION OF REGISTRANT

12 Months Ended

Dec. 26, 2018

Condensed Financial Information Disclosure [Abstract]

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 26 2018				December 27 2017
ASSETS
Current assets:
	Cash		$	5,686			$	4,988
	Prepaid expenses		135				100
	Total current assets		5,821				5,088
Deferred income taxes, net			242,353				185,750
Investment in subsidiaries			185,331				142,314
TOTAL ASSETS			$	433,505			$	333,152
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accrued expenses		171				70
	Due to SSE Holdings		3,534				4,217
	Current portion of liabilities under tax receivable agreement		5,804				937
	Total current liabilities		9,509				5,224
Liabilities under tax receivable agreement, net of current portion			197,921				158,436
Total liabilities			207,430				163,660
Commitments and contingencies
Stockholders' equity:
	Preferred stock, no par value—10,000,000 shares authorized; none issued and outstanding as of December 26, 2018 and December 27, 2017, respectively.		—				—
	Class A common stock, $0.001 par value—200,000,000 shares authorized; 29,520,833 and 26,527,477 shares issued and outstanding as of December 26, 2018 and December 27, 2017, respectively.		30				27
	Class B common stock, $0.001 par value—35,000,000 shares authorized; 7,557,347 and 10,250,007 shares issued and outstanding as of December 26, 2018 and December 27, 2017, respectively.		8				10
	Additional paid-in capital		195,633				153,105
	Retained earnings		30,404				16,399
	Accumulated other comprehensive loss		—				(49		)
	Total stockholders' equity		226,075				169,492
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY			$	433,505			$	333,152

See accompanying Notes to Condensed Financial Statements.

SHAKE SHACK INC.

CONDENSED STATEMENTS OF INCOME (LOSS)

(PARENT COMPANY ONLY)

(in thousands)

			Fiscal Year Ended
			December 26 2018				December 27 2017				December 28 2016
Intercompany revenue			$	2,055			$	1,466			$	1,603
TOTAL REVENUE			2,055				1,466				1,603
General and administrative expenses			1,933				1,692				1,603
TOTAL EXPENSES			1,933				1,692				1,603
OPERATING INCOME (LOSS)			122				(226		)		—
Equity in net income of subsidiaries			21,537				22,090				16,982
Other income			78				127,221				688
Interest expense			(14		)		(50		)		(16		)
INCOME BEFORE INCOME TAXES			21,723				149,035				17,654
Income tax expense			6,544				149,355				5,208
NET INCOME (LOSS)			$	15,179			$	(320	)		$	12,446

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 26 2018				December 27 2017				December 28 2016
Net income (loss)			$	15,179			$	(320	)		$	12,446
Other comprehensive income (loss), net of tax:
	Available-for-sale securities(1):
		Change in net unrealized holding losses	(3		)		(67		)		(22		)
		Less: reclassification adjustments for net realized losses included in net income	13				33				12
		Net change	10				(34		)		(10		)
OTHER COMPREHENSIVE INCOME (LOSS)			10				(34		)		(10		)
COMPREHENSIVE INCOME (LOSS)			$	15,189			$	(354	)		$	12,436

(1) Net of tax benefit of $0 for fiscal years ended December 26, 2018, December 27, 2017 and December 28, 2016.

See accompanying Notes to Condensed Financial Statements.

SHAKE SHACK INC.

CONDENSED STATEMENTS OF CASH FLOWS

(PARENT COMPANY ONLY)

(in thousands)

						Fiscal Year Ended
						December 26 2018				December 27 2017				December 28 2016
OPERATING ACTIVITIES
Net income (loss)						$	15,179			$	(320	)		$	12,446
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
	Equity in net income of subsidiaries					(21,537		)		(22,090		)		(16,982		)
	Equity-based compensation					252				234				189
	Non-cash reimbursement revenue treated as investment					—				—				(189		)
	Deferred income taxes					777				146,095				(462		)
	Other non-cash income					(78		)		(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				(7,103		)		(5,339		)		214
		Accrued expenses				5,669				21				(11		)
		Other current liabilities				14				(17		)		17
		Income taxes payable				—				2,990				5,023
NET CASH USED IN OPERATING ACTIVITIES						(6,827		)		(5,640		)		(446		)
INVESTING ACTIVITIES
Purchases of LLC Interests from SSE Holdings						(11,142		)		(5,522		)		(4,559		)
Return of investment in SSE Holdings						2,053				4,101				2,694
NET CASH USED IN INVESTING ACTIVITIES						(9,089		)		(1,421		)		(1,865		)
FINANCING ACTIVITIES
Proceeds from issuance of Class A common stock to SSE Holdings upon settlement of equity awards						11,142				5,522				2,489
Proceeds from stock option exercises						5,472				7,586				3,185
Payments under tax receivable agreement						—				(4,844		)		—
NET CASH PROVIDED BY FINANCING ACTIVITIES						16,614				8,264				5,674
INCREASE IN CASH						698				1,203				3,363
CASH AT BEGINNING OF PERIOD						4,988				3,785				422
CASH AT END OF PERIOD						$	5,686			$	4,988			$	3,785

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.

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 9 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 26, 2018, $3,534 of intercompany payables were eliminated in consolidation and $4,217 of intercompany payables were eliminated in consolidation as of December 27, 2017. For fiscal 2018, $2,055 and $21,537 of intercompany revenue and equity in net income of subsidiaries, respectively, was eliminated in consolidation. For fiscal 2017, $1,466 and $22,090 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 $203,725 and $159,373 as of December 26, 2018 and December 27, 2017, 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 15 to the consolidated financial statements for more information regarding the Parent Company's tax receivable agreement. As described in Note 18 to the consolidated financial statements, amounts payable under the tax receivable agreement are contingent upon, among other things, (i) generation of future taxable income of Shake Shack Inc. over the term of the tax receivable agreement and (ii) future changes in tax laws.

As of December 26, 2018 and December 27, 2017, liabilities under the tax receivable agreement totaled $203,725 and $159,373, respectively.

NOTE 4: SUPPLEMENTAL CASH FLOW INFORMATION

The following table sets forth supplemental cash flow information for fiscal 2018, 2017 and 2016:

						2018				2017				2016
Cash paid for:
	Income taxes					$	185			$	253			$	576
	Interest					—				2				—
Non-cash investing activities:
	Accrued contribution related to stock option exercises					5,472				7,586				1,116
	Class A common stock issued in connection with the acquisition of LLC Interests upon redemption by the non-controlling interest holders					15,202				4,415				18,944
	Non-cash contribution made in connection with equity awards granted to employees of SSE Holdings					5,999				5,497				5,304
Non-cash financing activities:
	Cancellation of Class B common stock in connection with the Organizational Transactions
	Cancellation of Class B common stock in connection with the redemption of LLC Interests					(2		)		(1		)		(5		)
	Establishment of liabilities under tax receivable agreement					44,338				18,973				100,063

X

- References

No definition available.

+ Details

Name:	srt_CondensedFinancialInformationOfParentCompanyOnlyDisclosureAbstract
Namespace Prefix:	srt_
Data Type:	xbrli:stringItemType
Balance Type:	na
Period Type:	duration

X

- Definition

The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 45
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=108774443&loc=d3e5283-111683

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 235
-Section S99
-Paragraph 2
-Subparagraph (SX 210.9-06)
-URI http://asc.fasb.org/extlink&oid=6882215&loc=d3e537971-122884

+ Details

Name:	us-gaap_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration