What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-05-07 compared with 2020-10-30 · 271 added, 446 removed, 480 unchanged (60% of the section changed)

7 unchanged sentences

2 | Shake Shack Inc.

Table of Content

SHAKE SHACK INC.

5 unchanged sentences

Marketable securities 40,914 36,887

Accounts receivable 7,729 9,970

Accounts receivable, net 8,838 9,464

Inventories 2,734 2,888

1 unchanged sentence

Total current assets 435,290 203,186

Property and equipment, net 326,526 314,862

Property and equipment, net of accumulated depreciation of $ 179,226 and $ 166,156 , respectively

348,580 336,541

Operating lease assets 312,087 306,317

10 unchanged sentences

Total current liabilities 118,749 109,705

Long-term debt 242,875 —

Long-term operating lease liabilities 349,670 343,736

5 unchanged sentences

Preferred stock, no par value—10,000,000 shares authorized;

none issued and outstanding as of September 23, 2020 and December 25, 2019.

none issued and outstanding as of March 31, 2021 and December 30, 2020.

Class A common stock, $0.001 par value—200,000,000 shares authorized;

38,280,102 and 34,417,302 shares issued and outstanding as of September 23, 2020 and December 25, 2019, respectively.

39,103,239 and 38,717,790 shares issued and outstanding as of March 31, 2021 and December 30, 2020, respectively.

Class B common stock, $0.001 par value—35,000,000 shares authorized;

3,112,002 and 3,145,197 shares issued and outstanding as of September 23, 2020 and December 25, 2019, respectively.

2,921,588 and 2,951,188 shares issued and outstanding as of March 31, 2021 and December 30, 2020, respectively.

Additional paid-in capital 400,371 395,067

9 unchanged sentences

Form 10-Q | 3

Table of Content

SHAKE SHACK INC.

1 unchanged sentence

(in thousands, except per share amounts)

Thirteen Weeks Ended Thirty-Nine Weeks Ended

2020 September 25

2019 September 23

2020 September 25

Thirteen Weeks Ended

2021 March 25

Shack sales $ 150,668 $ 138,048

7 unchanged sentences

General and administrative expenses 19,565 16,191

Depreciation expense 12,376 10,474 36,233 29,239

Depreciation and amortization expense 13,726 11,768

Pre-opening costs 3,576 2,243

1 unchanged sentence

TOTAL EXPENSES 165,303 143,957

OPERATING INCOME (LOSS) ( 6,798 ) 8,164 ( 31,660 ) 25,197

Other income, net 34 248 335 1,259

OPERATING LOSS ( 10,021 ) ( 787 )

Other income (expense), net 31 ( 93 )

Interest expense ( 515 ) ( 112 )

INCOME (LOSS) BEFORE INCOME TAXES ( 6,907 ) 8,279 ( 32,022 ) 26,154

Benefit from income taxes ( 797 ) ( 3,144 ) ( 6,802 ) ( 47 )

LOSS BEFORE INCOME TAXES ( 10,505 ) ( 992 )

Income tax expense (benefit) ( 11,080 ) 87

NET INCOME (LOSS) 575 ( 1,079 )

net income (loss) attributable to non-controlling interests ( 551 ) 1,079 ( 2,490 ) 4,281

net loss attributable to non-controlling interests ( 734 ) ( 119 )

NET INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.

8 unchanged sentences

4 | Shake Shack Inc.

Table of Content

SHAKE SHACK INC.

1 unchanged sentence

(in thousands)

Thirteen Weeks Ended Thirty-Nine Weeks Ended

2020 September 25

2019 September 23

2020 September 25

Thirteen Weeks Ended

2021 March 25

Net income (loss) $ 575 $ ( 1,079 )

Other comprehensive income, net of tax (1) :

Other comprehensive income (loss), net of tax (1) :

Change in foreign currency translation adjustment ( 1 ) 1

Net change ( 1 ) 1

OTHER COMPREHENSIVE INCOME — — 1 —

OTHER COMPREHENSIVE INCOME (LOSS) ( 1 ) 1

COMPREHENSIVE INCOME (LOSS) 574 ( 1,078 )

comprehensive income (loss) attributable to non-controlling interest ( 551 ) 1,079 ( 2,490 ) 4,281

comprehensive loss attributable to non-controlling interest ( 734 ) ( 119 )

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.

$ 1,308 $ ( 959 )

(1) Net of tax expense of $ 0 for the thirteen and thirty-nine weeks ended September 23, 2020 and September 25, 2019.

(1) Net of tax expense of $ 0 for the thirteen weeks ended March 31, 2021 and March 25, 2020.

See accompanying Notes to Condensed Consolidated Financial Statements.

1 unchanged sentence

Form 10-Q | 5

Table of Content

SHAKE SHACK INC.

1 unchanged sentence

(in thousands, except share amounts)

For the Thirteen Weeks Ended September 23, 2020 and September 25, 2019

For the Thirteen Weeks Ended March 31, 2021 and March 25, 2020

Common Stock Class B

Common Stock Additional

Capital Retained Earnings Accumulated Other Comprehensive Income Non-

Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Non-

Interest Total

Shares Amount Shares Amount

BALANCE, JUNE 24, 2020 38,236,538 $ 38 3,117,002 $ 3 $ 384,338 $ 37,196 $ 3 $ 29,707 $ 451,285

Net loss ( 5,559 ) ( 551 ) ( 6,110 )

Other comprehensive income:

BALANCE, DECEMBER 30, 2020 38,717,790 $ 39 2,951,188 $ 3 $ 395,067 $ 12,209 $ 3 $ 27,172 $ 434,493

Net income (loss) 1,309 ( 734 ) 575

Other comprehensive income (loss):

Net change in foreign currency translation adjustment ( 1 ) ( 1 )

3 unchanged sentences

Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis 213 213

Issuance of Class A common stock sold in equity offerings, net of underwriting discounts, commissions and offering costs — — — — —

Distributions paid to non-controlling interest holders ( 467 ) ( 467 )

BALANCE, SEPTEMBER 23, 2020 38,280,102 $ 38 3,112,002 $ 3 $ 386,011 $ 31,637 $ 3 $ 29,070 $ 446,762

BALANCE, JUNE 26, 2019 30,557,685 $ 31 6,731,209 $ 7 $ 208,866 $ 46,116 $ — $ 45,653 $ 300,673

Cumulative effect of accounting changes — — —

Net income 10,344 1,079 11,423

Equity-based compensation 1,908 1,908

Activity under stock compensation plans 172,403 — 1,786 1,839 3,625

Redemption of LLC Interests 231,599 — ( 231,599 ) — 1,635 ( 1,635 ) —

Effect of Gramercy Tavern Merger 2,690,263 3 ( 2,690,263 ) ( 3 ) 19,218 ( 19,218 )

Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis 705 705

Distribution to non-controlling interest owners ( 39 ) ( 39 )

BALANCE, SEPTEMBER 25, 2019 33,651,950 $ 34 3,809,347 $ 4 $ 234,118 $ 56,460 $ — $ 27,679 $ 318,295

6 | Shake Shack Inc.

Table of Content

For the Thirty-Nine Weeks Ended September 23, 2020 and September 25, 2019

Common Stock Class B

Common Stock Additional

Capital Retained Earnings Accumulated Other Comprehensive Income Non-

Interest Total

Shares Amount Shares Amount

BALANCE, MARCH 31, 2021 39,103,239 $ 39 2,921,588 $ 3 $ 400,371 $ 13,518 $ 2 $ 26,017 $ 439,950

BALANCE, DECEMBER 25, 2019 34,417,302 $ 35 3,145,197 $ 3 $ 244,410 $ 54,367 $ 2 $ 23,168 $ 321,985

Net loss ( 960 ) ( 119 ) ( 1,079 )

Other comprehensive income:

Other comprehensive income (loss):

Net change in foreign currency translation adjustment 1 1

3 unchanged sentences

Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis 628 628

Issuance of Class A common stock sold in equity offerings, net of underwriting discounts, commissions and offering costs 3,649,537 3 135,718 9,276 144,997

Distributions paid to non-controlling interest holders ( 305 ) ( 305 )

BALANCE, SEPTEMBER 23, 2020 38,280,102 $ 38 3,112,002 $ 3 $ 386,011 $ 31,637 $ 3 $ 29,070 $ 446,762

BALANCE, DECEMBER 26, 2018 29,520,833 $ 30 7,557,347 $ 8 $ 195,633 $ 30,404 $ — $ 47,380 $ 273,455

Cumulative effect of accounting changes 4,136 1,059 5,195

Net income 21,920 4,281 26,201

Equity-based compensation 5,918 5,918

Activity under stock compensation plans 383,117 — 2,718 2,998 5,716

Redemption of LLC Interests 1,057,737 1 ( 1,057,737 ) ( 1 ) 7,115 ( 7,115 ) —

Effect of Gramercy Tavern Merger 2,690,263 3 ( 2,690,263 ) ( 3 ) 19,218 ( 19,218 ) —

Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis 3,516 3,516

Distributions paid to non-controlling interest holders ( 1,706 ) ( 1,706 )

BALANCE, SEPTEMBER 25, 2019 33,651,950 $ 34 3,809,347 $ 4 $ 234,118 $ 56,460 $ — $ 27,679 $ 318,295

See accompanying Notes to Condensed Consolidated Financial Statements.

BALANCE, MARCH 25, 2020 34,523,400 $ 35 3,117,002 $ 3 $ 246,970 $ 53,407 $ 3 $ 22,188 $ 322,606

6 | Shake Shack Inc.

Form 10-Q | 7

Table of Content

SHAKE SHACK INC.

1 unchanged sentence

(in thousands)

Thirty-Nine Weeks Ended

2020 September 25

Thirteen Weeks Ended

2021 March 25

OPERATING ACTIVITIES

1 unchanged sentence

Adjustments to reconcile net income (loss) to net cash provided by operating activities

Depreciation expense 36,233 29,239

Depreciation and amortization expense 13,726 11,768

Amortization of debt issuance costs 86 —

Amortization of cloud computing asset 313 260

5 unchanged sentences

Impairment and loss on disposal of assets 369 2,088

Unrealized (gain) loss on available-for-sale securities 22 ( 231 )

Other non-cash expense 906 2

Unrealized loss on available-for-sale securities 46 356

Other non-cash (income) expense ( 1 ) 183

Changes in operating assets and liabilities:

14 unchanged sentences

Sales of marketable securities — 20,000

NET CASH USED IN INVESTING ACTIVITIES ( 27,316 ) ( 54,874 )

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES ( 27,228 ) 649

FINANCING ACTIVITIES

Proceeds from issuance of convertible notes, net of discount 243,750 —

Proceeds from revolving credit facility — 50,000

Payments on revolving credit facility ( 50,000 ) —

Deferred financing costs ( 70 ) —

Proceeds from issuance of Class A common stock sold in equity offerings, net of underwriting discounts, commissions and offering costs 144,997 —

Payments on principal of finance leases ( 602 ) ( 615 )

1 unchanged sentence

Payments under tax receivable agreement — ( 6,569 )

Debt issuance costs ( 649 ) —

Proceeds from stock option exercises 6,451 1,032

Employee withholding taxes related to net settled equity awards ( 3,010 ) ( 969 )

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 136,602 1,586

NET CASH PROVIDED BY FINANCING ACTIVITIES 245,403 42,574

NET INCREASE IN CASH AND CASH EQUIVALENTS 228,126 50,707

3 unchanged sentences

Shake Shack Inc.

Table of Content

Form 10-Q | 7

SHAKE SHACK INC.

4 unchanged sentences

Fair Value Measurements

Property and Equipment

Supplemental Balance Sheet Information

6 unchanged sentences

8 | Shake Shack Inc.

Form 10-Q | 9

Table of Content

NATURE OF OPERATIONS

Shake Shack Inc.

("we," "us," "our," "Shake Shack" and the "Company") 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 ("SSE Holdings").

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 ("SSE Holdings").

We are the sole managing member of SSE Holdings and, as sole managing member, we operate and control all of the business and affairs of SSE Holdings.

As a result, we consolidate the financial results of SSE Holdings and report a non-controlling interest representing the economic interest in SSE Holdings held by the other members of SSE Holdings.

As of September 23, 2020 we owned 92.5 % of SSE Holdings.

As of March 31, 2021 we owned 93.0 % of SSE Holdings.

Unless the context otherwise requires, "we," "us," "our," "Shake Shack," the "Company" and other similar references, refer to Shake Shack Inc.

1 unchanged sentence

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 September 23, 2020, there were 298 Shacks in operation, system-wide, of which 175 were domestic Company-operated Shacks, 22 were domestic licensed Shacks and 101 were international licensed Shacks.

As of September 23, 2020, 8 domestic Company-operated Shacks and 18 licensed Shacks were temporarily closed primarily due to COVID-19.

As of March 31, 2021, there were 321 Shacks in operation, system-wide, of which 192 were domestic Company-operated Shacks, 22 were domestic licensed Shacks and 107 were international licensed Shacks.

As of March 31, 2021, four domestic Company-operated Shacks and 16 licensed Shacks were temporarily closed, primarily due to the COVID-19 pandemic.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

13 unchanged sentences

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 September 23, 2020 and December 25, 2019, the net assets of SSE Holdings were $ 388,789 and $ 270,542 , respectively.

As of March 31, 2021 and December 30, 2020, the net assets of SSE Holdings were $ 380,713 and $ 383,669 , respectively.

The assets of SSE Holdings are subject to certain restrictions in SSE Holdings' revolving credit agreement.

5 unchanged sentences

Use of Estimates

The preparation of these condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the

The preparation of these condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and

Shake Shack Inc.

Table of Content

date of the financial statements, and the reported amounts of sales and expenses during the reporting period.

Form 10-Q | 9

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.

1 unchanged sentence

We adopted the Accounting Standards Updates (“ASUs”) summarized below in fiscal 2021.

Accounting Standards Update (“ASU”) Description Date

Measurement of Credit Losses on Financial Instruments

(ASU 2016-13)

This standard replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

The adoption of this standard did not have a material impact to our consolidated financial statements.

December 26, 2019

Facilitation of the Effects of Reference Rate Reform on Financial Reporting

(ASU 2020-04) This standard provides optional guidance for a limited time to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued.

The adoption of this standard did not have a material impact to our consolidated financial statements.

Effective upon issuance (March 12, 2020)

Recently Issued Accounting Pronouncements

Accounting Standards Update (“ASU”) Description Expected Impact Effective Date

Accounting Standards Update Description Date

Simplifying the Accounting for Income Taxes

(ASU 2019-12)

This standard simplifies various aspects related to accounting for income taxes by removing certain exceptions to the general principles in ASC 740, “Income Taxes” (“ASC 740”), and clarifying certain aspects of the current guidance to promote consistency among reporting entities.

The adoption of this standard is not expected to have a material impact on our consolidated financial statements.

(ASU 2019-12) This standard simplifies various aspects related to accounting for income taxes by removing certain exceptions to the general principles in ASC 740, “Income Taxes” (“ASC 740”), and clarifying certain aspects of the current guidance to promote consistency among reporting entities.

The adoption of this standard did not have a material impact to our condensed consolidated financial statements.

December 31, 2020

Early adoption is permitted.

Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own

Equity (Subtopic 815-40)—Accounting For Convertible Instruments and Contracts in an Entity's Own Equity.

(ASU 2020-06) This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity and improves and amends the related earnings per share guidance for both Subtopics.

We elected to early adopt this standard, beginning December 31, 2020.

The guidance of this ASU is applicable to our convertible notes issued in March 2021.

As a result, the convertible notes are accounted for as a single liability measured at amortized cost.

The if-converted earnings per share ("EPS") method is used, with the effect of potential share settlement included in diluted EPS.

Refer to Note 6, Debt, for further details of the convertible notes issued.

December 31, 2020

Revenue Recognition

Revenue consists of Shack sales and Licensing revenue.

Generally, revenue is recognized as promised goods or services transfer to the guest or customer in an amount that reflects the consideration we expect to be entitled in exchange for those goods or services.

Generally, revenue is recognized as promised goods or services transfer to the guest or customer in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

Shack revenues are recognized when payment is tendered at the point of sale as the performance obligation has been satisfied.

Revenue from Shack sales is presented net of discounts and recognized when food, beverage and retail products are sold.

8 unchanged sentences

The performance obligations are satisfied over time, starting when a Shack opens, through the end of the term of the license granted to the Shack.

Because we are transferring licenses to access our intellectual property during a contractual term, revenue is recognized on a straight-line

Shake Shack Inc.

Form 10-Q | 11

Table of Content

basis over the license term.

Generally, payment for the initial territory fee is received upon execution of the licensing agreement, and payment for the restaurant opening fees are received either in advance of or upon opening the related restaurant.

Because we are transferring licenses to access our intellectual property during a contractual term, revenue is recognized on a straight-line basis over the license term.

Generally, payment for the initial territory fee is received upon execution of the licensing agreement, and payment for the Shack opening fees are received either in advance of or upon opening the related Shack.

These payments are initially deferred and recognized as revenue as the performance obligations are satisfied, which occurs over a long-term period.

10 | Shake Shack Inc.

Revenue from sales-based royalties is recognized as the related sales occur.

Revenue recognized during the thirteen and thirty-nine weeks ended September 23, 2020 and September 25, 2019, disaggregated by type is as follows:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

2020 September 25

2019 September 23

2020 September 25

Revenue recognized during the thirteen weeks ended March 31, 2021 and March 25, 2020, disaggregated by type is as follows:

Thirteen Weeks Ended

2021 March 25

Shack sales $ 150,668 $ 138,048

3 unchanged sentences

Total revenue $ 155,282 $ 143,170

The aggregate amount of the transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) as of September 23, 2020 was $ 17,048 .

The aggregate amount of the transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) as of March 31, 2021 was $ 16,748 .

We expect to recognize this amount as revenue over a long-term period, as the license term for each Shack ranges from 5 to 20 years.

4 unchanged sentences

Shack sales receivables $ 5,641 $ 5,373

Licensing receivables 2,755 4,510

Licensing receivables, net of allowance for doubtful accounts 2,420 2,647

Gift card liability 2,600 2,637

1 unchanged sentence

Deferred revenue, long-term 11,965 12,151

Revenue recognized during the thirteen and thirty-nine weeks ended September 23, 2020 and September 25, 2019 that was included in their respective liability balances at the beginning of the period is as follows:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

2020 September 25

2019 September 23

2020 September 25

Revenue recognized during the thirteen weeks ended March 31, 2021 and March 25, 2020 that was included in their respective liability balances at the beginning of the period is as follows:

Thirteen Weeks Ended

2021 March 25

Gift card liability $ 219 $ 300

2 unchanged sentences

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 September 23, 2020 and December 25, 2019, and indicate the classification within the fair value hierarchy.

The carrying value of our Cash and cash equivalents, Accounts receivable, net, Accounts payable and Accrued expenses approximate their fair value due to the short-term nature of these financial instruments.

As of March 31, 2021 and December 30, 2020, we held certain assets that are required to be measured at fair value on a recurring basis including our Marketable securities, which consist of investments in equity securities.

Fair value of these investments is measured using Level 1 inputs (unadjusted quoted prices in active markets for identical assets).

The carrying value of these investments in equity securities approximates fair value.

Our assets measured at fair value on a recurring basis as of March 31, 2021 and December 30, 2020 were as follows:

Shake Shack Inc.

Form 10-Q | 11

Table of Content

Cash, Cash Equivalents and Marketable Securities

The following tables summarize our cash, cash equivalents and marketable securities by significant investment categories as of September 23, 2020 and December 25, 2019:

September 23, 2020

Cost Basis Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Marketable Securities

Cash $ 174,883 $ — $ — $ 174,883 $ 174,883 $ —

Money market funds — — — — — —

Mutual funds 16,829 50 — 16,879 — 16,879

Total $ 191,712 $ 50 $ — $ 191,762 $ 174,883 $ 16,879

Fair Value Measurements

2021 December 30

Cost Basis Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Marketable Securities

Cash $ 32,094 $ — $ — $ 32,094 $ 32,094 $ —

Money market funds 5,005 — — 5,005 5,005 —

Level 1 Level 1

Equity securities:

Mutual funds $ 40,914 $ 36,887

Total $ 73,535 $ 72 $ — $ 73,607 $ 37,099 $ 36,508

A summary of other income (loss) from equity securities recognized during the thirteen and thirty-nine weeks ended September 23, 2020 and September 25, 2019 is as follows:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

2020 September 25

2019 September 23

2020 September 25

Total Marketable securities $ 40,914 $ 36,887

Refer to Note 6, Debt, for the fair value of the Company's outstanding debt instruments.

A summary of Other income (expense) from equity securities recognized during the thirteen weeks ended March 31, 2021 and March 25, 2020 is as follows:

Thirteen Weeks Ended

2021 March 25

Equity securities:

3 unchanged sentences

Total $ 28 $ ( 93 )

A summary of equity securities sold and gross realized gains and losses recognized during the thirteen and thirty-nine weeks ended September 23, 2020 and September 25, 2019 is as follows:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

2020 September 25

2019 September 23

2020 September 25

Equity securities:

Gross proceeds from sales and redemptions $ — $ — $ 20,000 $ 27,000

Cost basis of sales and redemptions — — 19,921 26,978

Gross realized gains included in net income (loss) — — 79 36

Gross realized losses included in net income (loss) — — — ( 14 )

Realized gains and losses are determined on a specific identification method and are included in other income, net on the Condensed Consolidated Statements of Income (Loss).

As of September 23, 2020 and December 25, 2019, there was no decline in the market value of our marketable securities investment portfolio.

Shake Shack Inc.

Form 10-Q | 13

Table of Content

Other Financial Instruments

The carrying value of our other financial instruments, including accounts receivable, accounts payable, and accrued expenses as of September 23, 2020 and December 25, 2019 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, operating lease right-of-use assets and indefinite-lived intangible assets.

During the thirty-nine weeks ended September 23, 2020, we recognized an impairment charge of $ 1,132 at one location.

During the thirteen weeks ended March 25, 2020, we recognized an impairment charge of $ 1,132 at one location.

Of the total impairment charge, $ 736 was attributed to property and equipment held and used, $ 383 was attributed to operating lease right-of-use assets, and $ 13 was attributed to finance lease right-of-use assets.

The asset impairment charge is included in Impairment and loss on disposal of assets on the Condensed Consolidated Statement of Income (Loss).

The asset impairment charge was included in Impairment and loss on disposal of assets on the Condensed Consolidated Statement of Income (Loss).

The fair values of assets were determined using an income-based approach and are classified as Level 3 within the fair value hierarchy.

Significant inputs include projections of future cash flows, discount rates, Shack sales and profitability.

There were no impairment charges recognized during the thirteen weeks ended September 23, 2020, and the thirteen and thirty-nine weeks ended September 25, 2019.

Inventories are stated at the lower of cost or net realizable value with cost determined on a first-in, first-out basis.

We make adjustments to our inventory reserves for inventories that are deemed to be obsolete or slow moving.

As of September 23, 2020 and December 25, 2019, no adjustment was deemed necessary to reduce inventory to net realizable value.

Inventories as of September 23, 2020 and December 25, 2019 consisted of the following:

2020 December 25

Food $ 1,477 $ 1,738

Beverages 209 233

Retail merchandise 76 29

Paper goods 427 —

Inventories $ 2,383 $ 2,221

PROPERTY AND EQUIPMENT

Property and equipment as of September 23, 2020 and December 25, 2019 consisted of the following:

2020 December 25

Leasehold improvements $ 328,686 $ 302,204

Equipment 58,951 54,404

Furniture and fixtures 19,400 18,082

Computer equipment and software 27,160 24,226

Financing equipment lease assets 8,774 7,442

Construction in progress 37,560 30,290

Property and equipment, gross 480,531 436,648

accumulated depreciation 154,005 121,786

Property and equipment, net $ 326,526 $ 314,862

There were no impairment charges recognized during the thirteen weeks ended March 31, 2021.

Shake Shack Inc.

Table of Content

Form 10-Q | 12

SUPPLEMENTAL BALANCE SHEET INFORMATION

The components of other current liabilities as of September 23, 2020 and December 25, 2019 are as follows:

The components of Other current liabilities as of March 31, 2021 and December 30, 2020 are as follows:

2021 December 30

Sales tax payable $ 4,045 $ 4,285

Current portion of liabilities under tax receivable agreement — 7,777

Gift card liability 2,600 2,637

2 unchanged sentences

Other current liabilities $ 15,087 $ 14,200

The components of other long-term liabilities as of September 23, 2020 and December 25, 2019 are as follows:

The components of Other long-term liabilities as of March 31, 2021 and December 30, 2020 are as follows:

2021 December 30

2 unchanged sentences

Other long-term liabilities $ 22,297 $ 24,460

(1) As of September 23, 2020, Other included $ 3,388 of deferred lease incentive liabilities related to leases with variable lease cost as well as $ 2,461 of deferred social security taxes associated with the CARES Act.

For further information relating to the CARES Act, see Note 12, Income Taxes.

(1) As of March 31, 2021, Other included $ 3,359 of deferred lease incentive liabilities related to leases with variable lease cost as well as $ 2,607 of deferred Social Security taxes associated with the Coronavirus Aid, Relief, and Economic Security Act.

Revolving Credit Facility

In August 2019, we terminated our previous revolving credit facility and entered into a new revolving credit facility agreement ("Revolving Credit Facility"), which permits borrowings up to $ 50,000 , of which the entire amount is available immediately, with the ability to increase available borrowings up to an additional $ 100,000 , to be made available subject to satisfaction of certain conditions.

The Revolving Credit Facility will mature and all amounts outstanding will be due and payable in August 2024.

In August 2019, we entered into a revolving credit facility agreement ("Revolving Credit Facility"), which permits borrowings up to $ 50,000 , of which the entire amount is available immediately, with the ability to increase available borrowings up to an additional $ 100,000 , to be made available subject to satisfaction of certain conditions.

The Revolving Credit Facility also permits the issuance of letters of credit upon our request of up to $ 15,000 .

Borrowings under the Revolving Credit Facility will bear interest at either:

(i) LIBOR plus a percentage ranging from 1.0 % to 1.5 % or (ii) the base rate plus a percentage ranging from 0.0 % to 0.5 %, in each case depending on our net lease adjusted leverage ratio.

To the extent the LIBOR reference rate is no longer available, the administrative agent, in consultation with us, will determine a replacement rate which will be generally in accordance with similar transactions in which it serves as administrative agent.

In March 2020, we drew down the full $ 50,000 available under the Revolving Credit Facility to enhance liquidity and financial flexibility given the uncertain market conditions created by the COVID-19 pandemic.

We repaid this amount in full, plus interest, in June 2020.

In May 2020, we entered into a first amendment to the Revolving Credit Facility ("First Amendment"), which, among other things, provided for modified financial covenant compliance requirements for a period of time.

The First Amendment required us to maintain minimum liquidity of $ 25,000 through July 1, 2021 and outstanding borrowings during the applicable period covered by the First Amendment bore interest at either:

(i) the London Interbank Offered Rate ("LIBOR") plus a percentage ranging from 1.0 % to 2.5 % or (ii) the base rate plus a percentage ranging from 0.0 % to 1.5 %, in each case depending on our net lease adjusted leverage ratio.

In March 2021, we entered into a second amendment to the Revolving Credit Facility (“Second Amendment”).

The Second Amendment modified the applicable covenants and restrictions in the Credit Agreement to permit the incurrence of the Convertible Notes (as defined below), including obligations and transactions in connection therewith.

In addition, the Second Amendment, among other things, (i) extended the period applicable to the increased interest rate margin as set forth in the First Amendment;

(ii) shortened the maturity date of the Revolving Credit Facility from August 2024 to September 2022 and (iii) added mechanics relating to the transition from the use of LIBOR to the Secured Overnight Financing Rate ("SOFR") upon the discontinuance or unavailability of LIBOR.

Subsequently, and also in March 2021, we entered into a third amendment to the Revolving Credit Facility (“Third Amendment”) with JPMorgan Chase Bank, N.A.

(as successor agent to Wells Fargo Bank, National Association), as administrative agent, and

Shake Shack Inc.

Form 10-Q | 13

the lenders party thereto.

In addition, in March 2021, Wells Fargo Bank resigned as administrative agent under the Revolving Credit Facility and assigned its commitments thereunder to JPMorgan Bank, N.A.

The Third Amendment appoints JPMorgan Bank, N.A.

as administrative agent under the Revolving Credit Facility.

In addition, the Third Amendment, among other things, extends the maturity date of the Revolving Credit Facility from September 2022 to March 2026.

As of March 31, 2021 and December 30, 2020, no amounts were outstanding under the Revolving Credit Facility.

The obligations under the Revolving Credit Facility are secured by a first-priority security interest in substantially all of the assets of SSE Holdings and the guarantors.

1 unchanged sentence

The Revolving Credit Facility requires us to comply with maximum net lease adjusted leverage and minimum fixed charge coverage ratios.

We are not subject to these coverage ratios for a period of time due to the First Amendment to the Revolving Credit Facility described below.

We are not subject to these coverage ratios for a period of time due to the Second Amendment to the Revolving Credit Facility described above.

In addition, the Revolving Credit Facility contains other customary affirmative and negative covenants, including those which (subject to certain exceptions and dollar thresholds) limit our ability to incur debt;

5 unchanged sentences

and prohibits us, with certain exceptions, from engaging in any line of business not related to our current line of business.

As of September 23, 2020, we were in compliance with all covenants.

As of March 31, 2021, we were in compliance with all covenants.

As of March 31, 2021, the Revolving Credit Facility had unamortized deferred financing costs of $ 110 , and was included in Other assets on the Condensed Consolidated Balance Sheet.

Total interest expense related to the Revolving Credit Facility were $ 368 and $ 52 for the thirteen weeks ended March 31, 2021 and March 25, 2020, respectively.

Total interest expense for the thirteen weeks ended March 31, 2021 primarily included write-off of previously capitalized costs on the Revolving Credit Facility.

Convertible Notes

In March 2021, we issued $ 225,000 aggregate principal amount of 0% Convertible Senior Notes due 2028 (the “Convertible Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933.

We granted an option to the initial purchasers to purchase up to an additional $ 25,000 aggregate principal amount of Convertible Notes to cover over-allotments, which was subsequently fully exercised during March 2021, resulting in a total issuance of $ 250,000 aggregate principal amount of Convertible Notes.

The Convertible Notes will mature on March 1, 2028, unless earlier converted, redeemed or repurchased in certain circumstances.

Upon conversion, we pay or deliver, as the case may be, cash, shares of Shake Shack’s Class A common stock or a combination of cash and shares of Shake Shack’s Class A common stock, at our election.

The Convertible Notes are convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding December 1, 2027, only under the following circumstances:

(1) during any fiscal quarter commencing after the fiscal quarter ending on June 30, 2021 (and only during such fiscal quarter), if the last reported sale price of our Class A common stock, par value $ 0.001 per share, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price for the Convertible Notes on each applicable trading day;

(2) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price (as defined in the Indenture) per $1,000 principal amount of the Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of Class A common stock and the conversion rate for the Convertible Notes on each such trading day;

(3) if we call such Convertible Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the Convertible Notes called (or deemed called) for redemption;

and (4) upon the occurrence of specified corporate events as set forth in the Indenture.

On or after December 1, 2027, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders of the Convertible Notes may convert all or any portion of their Convertible Notes at any time, regardless of the foregoing circumstances.

The Convertible Notes had an initial conversion rate of 5.8679 shares of Shake Shack’s Class A common stock per $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $ 170.42 per share of Shake Shack’s Class A common stock.

We may not redeem the Convertible Notes prior to March 6, 2025.

We may redeem for cash all or any portion of the Convertible Notes, at our option, on or after March 6, 2025 if the last reported sale price of Shake Shack’s Class A common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30

Shake Shack Inc.

Form 10-Q | 14

Table of Content

In May 2020, we entered into a first amendment to the Revolving Credit Facility ("First Amendment"), which, among other things, provides for modified financial covenant compliance requirements for a period of time.

The First Amendment requires us to maintain minimum liquidity of $ 25,000 through July 1, 2021 and outstanding borrowings during the applicable period covered by the First Amendment bear interest at either:

(i) LIBOR plus a percentage ranging from 1.0 % to 2.5 % or (ii) the base rate plus a percentage ranging from 0.0 % to 1.50 %, in each case depending on our net lease adjusted leverage ratio.

We repaid this amount in full, plus interest, in June 2020.

Total interest costs incurred were $ 143 and $ 697 for the thirteen and thirty-nine weeks ended September 23, 2020, respectively, and $ 133 and $ 302 for the thirteen and thirty-nine weeks ended September 25, 2019, respectively.

Paycheck Protection Program

In April 2020, we entered into a $ 10,000 note payable with J.P.

Morgan pursuant to the Paycheck Protection Program (“PPP Loan”) under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") and returned the entire outstanding balance plus interest in April 2020.

consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid special interest, if any, to, but excluding, the redemption date.

In addition, if we undergo a fundamental change (as defined in the indenture governing the Convertible Notes), subject to certain conditions, holders may require us to repurchase for cash all or any portion of their Convertible Notes at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid special interest, if any, to, but excluding, the fundamental change repurchase date.

In addition, following certain corporate events that occur prior to the maturity date of the Convertible Notes or if we deliver a notice of redemption in respect of some or all of the Convertible Notes, we will, in certain circumstances, increase the conversion rate of the Convertible Notes for a holder who elects to convert our Convertible Notes in connection with such a corporate event or convert our Convertible Notes called (or deemed called) for redemption during the related redemption period, as the case may be.

Contemporaneously with the issuance of the Convertible Notes, Shake Shack Inc.

entered into an intercompany note with SSE Holdings, LLC (“Intercompany Note”).

SSE Holdings promises to pay Shake Shack, Inc., for value received, the principal amount with interest of the Intercompany Note in March 2028.

Shake Shack Inc.

will exercise its right to convert the Intercompany Note to maintain at all times a one-to-one ratio between the number of common units, directly or indirectly, by Shake Shack Inc and the aggregate number of outstanding shares of common stock.

As of March 31, 2021, the Convertible Notes had a gross principal balance of $ 250,000 and a balance of $ 242,875 , net of unamortized discount and debt issuance costs of $ 7,125 .

As of March 31, 2021, the unamortized balance of discount and debt issuance costs was recorded as a contra-liability and netted with Long-term debt on the Condensed Consolidated Balance Sheets and was being amortized as interest expense using the effective interest method.

Total amortization expense was $ 86 for the thirteen weeks ended March 31, 2021 and was included in Interest expense in the Condensed Consolidated Statements of Income (Loss).

In connection with the Convertible Notes, we also incurred costs of $ 236 , including consulting and advisory fees, in the thirteen weeks ended March 31, 2021 and was included in General and administrative expense in the Condensed Consolidated Statements of Income (Loss).

At March 31, 2021, the fair value of the Convertible Notes was approximately $ 248,125 , based on external pricing data, including available quoted market prices of these instruments, and consideration of comparable debt instruments with similar interest rates and trading frequency, among other factors, and is classified as a Level 2 measurement within the fair value hierarchy.

Nature of 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 2036.

We currently 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 2037.

We evaluate contracts entered into to determine whether the contract involves the use of property or equipment, which is either explicitly or implicitly identified in the contract.

6 unchanged sentences

Our real estate leases 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 is 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 lease expense on a straight-line basis over the lease term from the date we take possession of the leased property.

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.

Fixed minimum rent payments are recognized on a straight-line basis over the lease term from the date we take possession of the leased property.

Lease expense incurred before a Shack opens is recorded in Pre-opening costs on the Condensed Consolidated Statements of Income (Loss).

Once a domestic Company-operated Shack opens, we record the straight-line lease expense and any contingent rent, if applicable, in occupancy and related expenses on the Condensed Consolidated Statements of Income (Loss).

Once a domestic Company-operated Shack opens, we record the straight-line lease

Shake Shack Inc.

Form 10-Q | 15

expense and any contingent rent, if applicable, in Occupancy and related expenses on the Condensed 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 Condensed Consolidated Statements of Income (Loss).

As there were no explicit rates provided in our leases, we used our incremental borrowing rate in determining the present value of future lease payments.

The discount rate used to measure the lease liability at the transition date was derived from the average of the yield curves obtained from using the notching method and the recovery rate method.

As there are no explicit rates provided in our leases, we use our incremental borrowing rate in determining the present value of future lease payments.

The discount rate used to measure the lease liability is derived from the average of the yield curves obtained from using the notching method and the recovery rate method.

The most significant assumption in calculating the incremental borrowing rate is our credit rating and is subject to judgment.

2 unchanged sentences

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 cash, full or partial credits against our future minimum

16 | Shake Shack Inc.

Table of Content

or contingent rents otherwise payable by us, or a combination thereof.

If obtained, landlord incentives usually take the form of cash, full or partial credits against our future minimum or contingent rents otherwise payable by us, or a combination thereof.

In most cases, landlord incentives are received after we take possession of the property, as we meet required milestones during the construction of the property.

We include these amounts in the measurement of the initial operating lease liability, which are also reflected as a reduction to the initial measurement of the right-of-use asset.

A summary of finance and operating lease right-of-use assets and liabilities as of September 23, 2020 and December 25, 2019 is as follows:

Classification September 23

A summary of finance and operating lease right-of-use assets and liabilities as of March 31, 2021 and December 30, 2020 is as follows:

Classification March 31

2021 December 30

9 unchanged sentences

Total lease liabilities $ 393,446 $ 384,977

The components of lease expense for the thirteen and thirty-nine weeks ended September 23, 2020 and September 25, 2019 was as follows:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

Classification September 23

2020 September 25

2019 September 23

2020 September 25

The components of lease expense for the thirteen weeks ended March 31, 2021 and March 25, 2020 was as follows:

Thirteen Weeks Ended

Classification March 31

2021 March 25

Finance lease cost:

2 unchanged sentences

Operating lease cost Occupancy and related expenses

General and administrative expenses

Pre-opening costs

Short-term lease cost Occupancy and related expenses 138 279 331 313

Variable lease cost Other operating expenses

Occupancy and related expenses

General and administrative expenses 12,330 10,742

Short-term lease cost Occupancy and related expenses 82 124

Variable lease cost Occupancy and related expenses

Pre-opening costs

General and administrative expenses 2,851 3,730

Total lease cost $ 15,930 $ 15,228

1 unchanged sentence

Form 10-Q | 16

Table of Content

As of September 23, 2020, future minimum lease payments for finance and operating leases consisted of the following:

As of March 31, 2021, future minimum lease payments for finance and operating leases consisted of the following:

Finance Leases Operating Leases

8 unchanged sentences

Total lease liabilities $ 6,501 $ 386,945

As of September 23, 2020 we had additional operating lease commitments of $ 45,605 for non-cancelable leases without a possession date, which will begin to commence in 2020.

As of March 31, 2021 we had additional operating lease commitments of $ 55,964 for non-cancelable leases without a possession date, which will begin to commence in 2021.

These lease commitments are consistent with the leases that we have executed thus far.

A summary of lease terms and discount rates for finance and operating leases as of September 23, 2020 and December 25, 2019 is as follows:

A summary of lease terms and discount rates for finance and operating leases as of March 31, 2021 and December 30, 2020 is as follows:

2021 December 30

5 unchanged sentences

Operating leases 3.9 % 4.2 %

Supplemental cash flow information related to leases for the thirty-nine weeks ended September 23, 2020 and September 25, 2019 is as follows:

Thirty-Nine Weeks Ended

2020 September 25

Supplemental cash flow information related to leases for the thirteen weeks ended March 31, 2021 and March 25, 2020 is as follows:

Thirteen Weeks Ended

2021 March 25

Cash paid for amounts included in the measurement of lease liabilities:

12 unchanged sentences

Form 10-Q | 17

Table of Content

exchange, we will receive a corresponding number of LLC Interests, increasing our total ownership interest in SSE Holdings.

1 unchanged sentence

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.

On April 17, 2020, we announced an “at-the-market” equity offering program (the “ATM Program”), under which we may offer and sell shares of our Class A common stock having an aggregate price of up to $ 75,000 from time to time.

On April 21, 2020, we completed the sale of 233,467 shares of our Class A common stock pursuant to the ATM Program and received $ 9,794 of proceeds, net of commissions.

The proceeds were used to purchase newly-issued LLC Interests.

On April 21, 2020, we completed an underwritten offering of 3,416,070 shares of our Class A common stock, resulting in $ 135,857 of proceeds, net of underwriting discounts and commissions.

The proceeds were used to purchase newly-issued LLC Interests.

The following table summarizes the ownership interest in SSE Holdings as of September 23, 2020 and December 25, 2019.

September 23, 2020 December 25, 2019

The following table summarizes the ownership interest in SSE Holdings as of March 31, 2021 and December 30, 2020.

March 31, 2021 December 30, 2020

LLC Interests Ownership% LLC Interests Ownership %

5 unchanged sentences

and the non-controlling interest holders.

The non-controlling interest holders' weighted average ownership percentage for the thirteen and thirty-nine weeks ended September 23, 2020 was 7.5 % and 7.9 %, respectively.

The non-controlling interest holders' weighted average ownership percentage for the thirteen and thirty-nine weeks ended September 25, 2019 was 14.4 % and 17.9 %, respectively.

Shake Shack Inc.

Form 10-Q | 19

Table of Content

The following table summarizes the effects of changes in ownership of SSE Holdings on our equity during the thirteen and thirty-nine weeks ended September 23, 2020 and September 25, 2019.

Thirteen Weeks Ended Thirty-Nine Weeks Ended

2020 September 25

2019 September 23

2020 September 25

The non-controlling interest holders' weighted average ownership percentage for the thirteen weeks ended March 31, 2021 and March 25, 2020 was 7.0 % and 8.4 %, respectively.

The following table summarizes the effects of changes in ownership of SSE Holdings on our equity during the thirteen weeks ended March 31, 2021 and March 25, 2020.

Thirteen Weeks Ended

2021 March 25

Net income (loss) attributable to Shake Shack Inc.

2 unchanged sentences

Increase in additional paid-in capital as a result of the redemption of LLC Interests 36 195

Increase in additional paid-in-capital as a result of the GTC Merger — 19,218 — 19,218

Increase (decrease) in additional paid-in capital as a result of activity under stock compensation plans and the related income tax effect 3,359 424

Increase in additional paid-in-capital as a result of the issuance of Class A common stock sold in equity offerings — — 135,718 —

Total effect of changes in ownership interest on equity attributable to Shake Shack Inc.

$ 4,704 $ ( 341 )

The following table summarizes redemptions of LLC Interests activity during the thirteen and thirty-nine weeks ended September 23, 2020 and September 25, 2019.

Thirteen Weeks Ended Thirty-Nine Weeks Ended

2020 September 25

2019 September 23

2020 September 25

The following table summarizes redemptions of LLC Interests activity during the thirteen weeks ended March 31, 2021 and March 25, 2020.

Thirteen Weeks Ended

2021 March 25

Redemption and acquisition of LLC Interests

Number of LLC Interests redeemed by non-controlling interest holders 29,600 28,195

Number of LLC Interests acquired in connection with the Gramercy Tavern Merger — 2,690,263 — 2,690,263

Number of LLC Interests received by Shake Shack Inc.

2 unchanged sentences

Shares of Class A common stock issued in connection with redemptions of LLC Interests 29,600 28,195

Shares of Class A common stock issued in connection with the Gramercy Tavern Merger — 2,690,263 — 2,690,263

Cancellation of Class B common stock

Shares of Class B common stock surrendered and canceled 29,600 28,195

Shares of Class B common stock surrendered and canceled in connection with the Gramercy Tavern Merger — 2,690,263 — 2,690,263

During the thirteen and thirty-nine weeks ended September 23, 2020, we received an aggregate of 38,564 and 180,068 LLC Interests, respectively, in connection with the activity under our stock compensation plan and 172,403 and 383,117 LLC Interests, respectively, during the thirteen and thirty-nine weeks ended September 25, 2019.

Pursuant to a Stockholders Agreement, dated as of February 4, 2015, as amended, by and among Daniel H.

Meyer, the Daniel H.

Meyer 2012 Gift Trust dtd 10/31/12 (the "Gift Trust"), other affiliates (collectively, the "Meyer Stockholders") and other parties thereto, the Meyer Stockholders had the right to cause all of the shares of Gramercy Tavern Corp.

("GTC") to be exchanged for shares of our Class A common stock pursuant to a tax-free reorganization.

In August 2019, the Meyer Stockholders exercised their right with respect to GTC (the "GTC Merger").

To effect the GTC Merger, a newly-formed wholly-owned subsidiary of Shake Shack Inc.

merged with and into GTC, with GTC as the surviving entity, which was then merged with and into Shake Shack Inc.

Prior to the GTC Merger, GTC owned 2,690,263 LLC Interests and an equivalent number of shares of our Class B common stock.

The stockholders of GTC, received on a one-for-one basis, 2,690,263 shares of Class A common stock based upon the amount of shares of GTC held by the stockholders;

all of the shares of Class B common stock held by GTC were cancelled;

and all of the LLC Interests held by GTC were transferred to us.

During the thirteen weeks ended March 31, 2021 and March 25, 2020, we received an aggregate of 355,849 and 77,903 LLC Interests, respectively, in connection with the activity under our stock compensation plan .

18 | Shake Shack Inc.

Table of Content

EQUITY-BASED COMPENSATION

A summary of equity-based compensation expense recognized during the thirteen and thirty-nine weeks ended September 23, 2020 and September 25, 2019 is as follows:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

2020 September 25

2019 September 23

2020 September 25

A summary of equity-based compensation expense recognized during the thirteen weeks ended March 31, 2021 and March 25, 2020 is as follows:

Thirteen Weeks Ended

2021 March 25

Stock options $ 20 $ 261

3 unchanged sentences

Total income tax benefit recognized related to equity-based compensation $ 67 $ 36

Equity-based compensation expense is included in general and administrative expenses and labor and related expenses on the Condensed Consolidated Statements of Income (Loss) during the thirteen and thirty-nine weeks ended September 23, 2020 and September 25, 2019 as follows:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

2020 September 25

2019 September 23

2020 September 25

Equity-based compensation expense is included in General and administrative expenses and Labor and related expenses on the Condensed Consolidated Statements of Income (Loss) during the thirteen weeks ended March 31, 2021 and March 25, 2020 as follows:

Thirteen Weeks Ended

2021 March 25

General and administrative expenses $ 1,541 $ 1,214

10 unchanged sentences

We are also subject to withholding taxes in foreign jurisdictions.

Shake Shack Inc.

Form 10-Q | 21

Table of Content

Income Tax Expense (Benefit)

A reconciliation of income tax expense (benefit) computed at the U.S.

federal statutory income tax rate to the recognized income tax expense (benefit) is as follows:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

2020 September 25

2019 September 23

2020 September 25

Expected U.S.

federal income taxes at statutory rate $ ( 1,450 ) 21.0 % $ 1,738 21.0 % $ ( 6,725 ) 21.0 % $ 5,492 21.0 %

State and local income taxes, net of federal benefit ( 492 ) 7.1 % 505 6.1 % ( 2,192 ) 6.8 % 1,746 6.7 %

Foreign withholding taxes 504 ( 7.3 ) % 655 7.9 % 712 ( 2.2 ) % 1,624 6.2 %

Tax credits ( 701 ) 10.1 % ( 2,874 ) ( 34.7 ) % ( 1,128 ) 3.5 % ( 4,697 ) ( 18.0 ) %

Return to provision adjustment 132 ( 1.9 ) % ( 153 ) ( 1.8 ) % 132 ( 0.4 ) % ( 153 ) ( 0.6 ) %

Non-controlling interest ( 11 ) 0.2 % ( 346 ) ( 4.2 ) % 411 ( 1.3 ) % ( 1,291 ) ( 4.9 ) %

Tax effect of change in basis related to the adoption of ASC 842 — — % — — % — — % 1,161 4.4 %

Change in valuation allowance 1,221 ( 17.7 ) % ( 2,587 ) ( 31.2 ) % 1,971 ( 6.2 ) % ( 3,847 ) ( 14.7 ) %

Other — — % ( 82 ) ( 1.0 ) % 17 — % ( 82 ) ( 0.3 ) %

Income tax benefit $ ( 797 ) 11.5 % $ ( 3,144 ) ( 38.0 ) % $ ( 6,802 ) 21.2 % $ ( 47 ) ( 0.2 ) %

Our effective income tax rates for the thirteen weeks ended September 23, 2020 and September 25, 2019 were 11.5 % and ( 38.0 )%, respectively.

The increase was primarily driven by lower pre-tax book income resulting in a loss, causing the tax credits to have an increasing effect on the tax rate, as well as the recognition of a valuation allowance against foreign tax credits that are not expected to be realized before the expiration of the carryforward period.

Our effective income tax rates for the thirteen weeks ended March 31, 2021 and March 25, 2020 were 105.5 % and ( 8.8 )%, respectively.

The increase was primarily driven by lower pre-tax book income resulting in a loss, causing tax credits and windfall tax benefits related to equity-based compensation to have an increasing effect on the tax rate, as well as a reduction of a valuation allowance.

Additionally, an increase in our ownership interest in SSE Holdings increases our share of the taxable income (loss) of SSE Holdings.

Our weighted-average ownership interest in SSE Holdings was 92.5 % and 85.6 % for the thirteen weeks ended September 23, 2020 and September 25, 2019, respectively.

Our effective income tax rates for the thirty-nine weeks ended September 23, 2020 and September 25, 2019 were 21.2 % and ( 0.2 )%, respectively.

These were partially offset by a reduction in the tax effect of changes related to the adoption of new accounting standards, for which there were none during the thirty-nine weeks ended September 23, 2020.

Additionally, as noted above, an increase in our ownership interest in SSE Holdings increases our share of the taxable income (loss) of SSE Holdings.

Our weighted-average ownership interest in SSE Holdings was 92.1 % and 82.1 % for the thirty-nine weeks ended September 23, 2020 and September 25, 2019, respectively.

Our weighted-average ownership interest in SSE Holdings was 93.0 % and 91.6 % for the thirteen weeks ended March 31, 2021 and March 25, 2020, respectively.

Deferred Tax Assets and Liabilities

During the thirty-nine weeks ended September 23, 2020, we acquired an aggregate of 213,263 LLC Interests in connection with the redemption of LLC Interests, activity relating to our stock compensation plan, and in connection with the second quarter equity offering.

During the thirteen weeks ended March 31, 2021, we acquired an aggregate of 385,449 LLC Interests in connection with the redemption of LLC Interests, and activity relating to our stock compensation plan.

We recognized a deferred tax asset in the amount of $ 10,204 associated with the basis difference in our investment in SSE Holdings upon acquisition of these LLC Interests.

As of September 23, 2020, the total deferred tax asset related to the basis difference in our investment in SSE Holdings was $ 175,320 .

As of March 31, 2021, the total deferred tax asset related to the basis difference in our investment in SSE Holdings was $ 142,867 .

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.

During the thirty-nine weeks ended September 23, 2020, we also recognized $ 116 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.

As of March 31, 2021, the total valuation allowance established against the deferred tax asset to which this portion relates was $ 1,260 .

Shake Shack Inc.

Form 10-Q | 19

During the thirteen weeks ended March 31, 2021, we also recognized $ 300 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," herein 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 September 23, 2020, 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 related to New York City UBT and certain foreign tax credits) are more likely than not to be realized.

22 | Shake Shack Inc.

Table of Content

additional valuation allowance of $ 1,221 was recognized on certain foreign tax credits not expected to be realized before the expiration of the carryforward period.

Uncertain Tax Positions

No uncertain tax positions existed as of September 23, 2020.

Shake Shack Inc.

was formed in September 2014 and did not engage in any operations prior to our initial public offering in February of 2015 and related 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 2015 for SSE Holdings.

As of March 31, 2021, 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 eventual sale of our interest in SSE Holdings, New York City UBT credits and certain foreign tax credits) are more likely than not to be realized.

As such, no additional valuation allowance was recognized.

Tax Receivable Agreement

9 unchanged sentences

The rights of each member of SSE Holdings that is a party to the Tax Receivable Agreement, are assignable to transferees of their respective LLC Interests.

During the thirty-nine weeks ended September 23, 2020, we acquired an aggregate of 33,195 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.

During the thirteen weeks ended March 31, 2021, we acquired an aggregate of 29,600 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 $ 1,094 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.

During the thirty-nine weeks ended September 23, 2020 and September 25, 2019, payments of $ 6,643 and $ 707 , inclusive of interest, were made to the parties to the Tax Receivable Agreement, respectively.

As of September 23, 2020, the total amount of TRA Payments due under the Tax Receivable Agreement, was $ 228,197 , of which no amount was included in other current liabilities on the Condensed Consolidated Balance Sheet.

During the thirteen weeks ended March 31, 2021 and March 25, 2020, payments of $ 0 and $ 6,569 , inclusive of interest, were made to the parties to the Tax Receivable Agreement, respectively.

As of March 31, 2021, the total amount of TRA Payments due under the Tax Receivable Agreement, was $ 234,048 .

See Note 13, Commitments and Contingencies, for more information relating to our liabilities under the Tax Receivable Agreement.

On March 27, 2020, the U.S.

government enacted the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) to provide certain relief as a result of the COVID-19 pandemic.

The CARES Act provides tax relief, along with other stimulus measures, including a retroactive technical correction of prior tax legislation for tax depreciation of certain qualified improvement property, among other changes.

We are currently estimating the amount of accelerated tax depreciation deductions as a result of the technical amendments made by the CARES Act to qualified improvement property.

During the thirty-nine weeks ended September 23, 2020, we recognized accelerated tax depreciation deductions of $ 446 related to assets placed in service in fiscal 2020, and are recorded as components within our deferred income taxes, net on the Condensed Consolidated Balance Sheets.

In addition, subsequent to the second quarter of 2020, we began deferring the employer-paid portion of social security taxes as permitted by the CARES Act.

Shake Shack Inc.

Form 10-Q | 23

Table of Content

EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share of Class A common stock is computed by dividing net income (loss) attributable to Shake Shack Inc.

by the weighted-average number of shares of Class A common stock outstanding during the period.

Diluted earnings (loss) per share of Class A common stock is computed by dividing net income (loss) 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 (loss) per share of Class A common stock for the thirteen and thirty-nine weeks ended September 23, 2020 and September 25, 2019.

Thirteen Weeks Ended Thirty-Nine Weeks Ended

2020 September 25

2019 September 23

2020 September 25

Net income (loss) $ ( 6,110 ) $ 11,423 $ ( 25,220 ) $ 26,201

net income (loss) attributable to non-controlling interests ( 551 ) 1,079 ( 2,490 ) 4,281

Net income (loss) attributable to Shake Shack Inc.

$ ( 5,559 ) $ 10,344 $ ( 22,730 ) $ 21,920

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings (loss) per share of Class A common stock (in thousands, except per share amounts) for the thirteen weeks ended March 31, 2021 and March 25, 2020.

20 | Shake Shack Inc.

Thirteen Weeks Ended

2021 March 25

Net income (loss) attributable to Shake Shack Inc.—basic $ 1,309 $ ( 960 )

Reallocation of net loss attributable to non-controlling interests from the assumed conversion of Class B shares ( 734 ) —

Net income (loss) attributable to Shake Shack Inc.—diluted $ 575 $ (960)

Weighted-average shares of Class A common stock outstanding—basic 38,948 34,444

3 unchanged sentences

Restricted stock units 164 —

Convertible Notes 451 —

Shares of Class B common stock 2,941 —

Weighted-average shares of Class A common stock outstanding—diluted 42,789 34,444

3 unchanged sentences

As such, separate presentation of basic and diluted earnings (loss) per share of Class B common stock under the two-class method has not been presented.

24 | Shake Shack Inc.

Table of Content

The following table presents potentially dilutive securities, as of the end of the period, excluded from the computations of diluted earnings (loss) per share of Class A common stock for the thirteen and thirty-nine weeks ended September 23, 2020 and September 25, 2019.

Thirteen Weeks Ended Thirty-Nine Weeks Ended

2020 September 25

2019 September 23

2020 September 25

However, shares of our Class B common stock outstanding for the period are considered potentially dilutive shares of Class A common stock under application of the if-converted method and are included in the computation of diluted earnings (loss) per share, except when the effect would be antidilutive.

Thirteen Weeks Ended

2021 March 25

Stock options 1,698 (1) 847,207 (3)

2 unchanged sentences

Shares of Class B common stock — 3,117,002 (3)

(1) Represents number of instruments outstanding at the end of the period that were excluded from the computation of diluted earnings per share of Class A common stock because the effect would have been anti-dilutive.

(2) 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.

(3) Shares of our Class B common stock outstanding as of the end of the period 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.

(1) Number of securities outstanding at the end of the period that were excluded from the computation of diluted earnings (loss) 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").

(2) Number of securities outstanding at the end of the period that were excluded from the computation of diluted earnings (loss) 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.

(3) Number of securities outstanding at the end of the period that were excluded from the computation of diluted earnings (loss) per share of Class A common stock because the effect would have been anti-dilutive.

Shake Shack Inc.

Form 10-Q | 21

SUPPLEMENTAL CASH FLOW INFORMATION

The following table sets forth supplemental cash flow information for the thirty-nine weeks ended September 23, 2020 and September 25, 2019:

Thirty-Nine Weeks Ended

2020 September 25

The following table sets forth supplemental cash flow information for the thirteen weeks ended March 31, 2021 and March 25, 2020:

Thirteen Weeks Ended

2021 March 25

Cash paid for:

5 unchanged sentences

Non-cash financing activities:

Class A common stock issued in connection with the redemption of LLC Interests — 1

Class A common stock issued in connection with the GTC merger — 3

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

Cancellation of Class B common stock in connection with the GTC Merger — (3)

Revolving Credit Facility amendment-related accrual

Convertible Notes issuance-related accrual 312 —

Establishment of liabilities under tax receivable agreement 1,094 310

Shake Shack Inc.

Form 10-Q | 25

Table of Content

COMMITMENTS AND CONTINGENCIES

1 unchanged sentence

We are obligated under various operating leases for Shacks and our home office space, expiring in various years through 2037.

Under certain of these leases, we are liable for contingent rent based on a percentage of sales in excess of specified thresholds and are typically responsible for our proportionate share of real estate taxes, common area maintenance charges and utilities.

See Note 7, Leases.

As security under the terms of one of our leases, we are obligated under a letter of credit totaling $ 130 as of September 23, 2020, which expires in February 2026.

As security under the terms of one of our leases, we are obligated under a letter of credit totaling $ 130 as of March 31, 2021, which expires in February 2026.

Additionally, in September 2017, we entered into a letter of credit in conjunction with our new home office lease in the amount of $ 603 , which expires in August 2021 and renews automatically for one-year periods through January 31, 2034.

4 unchanged sentences

Legal Contingencies

In March 2020, a claim was filed against Shake Shack alleging certain violations of the Fair Labor Standards Act.

At a mediation between the parties, we agreed to settle the matter with the plaintiff and other employees who elect to participate in the settlement for $ 595 .

As of March 31, 2021, an accrual in the amount of $ 595 was recorded for this matter and related expenses.

In February 2018, a claim was filed against Shake Shack in California state court alleging certain violations of the California Labor Code.

At a mediation between the parties, we agreed to settle the matter with the plaintiff and all other California employees who elect to participate in the settlement for $ 1,200 .

As of September 23, 2020, an accrual in the amount of $ 1,180 was recorded for this matter and related expenses.

As of March 31, 2021, an accrual in the amount of $ 1,180 was recorded for this matter and related expenses.

22 | Shake Shack Inc.

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 September 23, 2020, the amount of the ultimate liability with respect to these matters was not material.

As of March 31, 2021, the amount of the ultimate liability with respect to these matters was not material.

Liabilities under Tax Receivable Agreement

3 unchanged sentences

If we do not generate sufficient taxable income in the aggregate over the term of the Tax Receivable Agreement to utilize the tax benefits, then we would not be required to make the related TRA Payments.

During the thirty-nine weeks ended September 23, 2020 and September 25, 2019, we recognized liabilities totaling $ 414 and $ 20,027 , respectively, relating to our obligations under the Tax Receivable Agreement, after concluding that it was probable that we would have sufficient future taxable income over the term of the Tax Receivable Agreement to utilize the related tax benefits.

As of September 23, 2020 and December 25, 2019, our total obligations under the Tax Receivable Agreement were $ 228,197 and $ 234,426 , respectively.

During the thirteen weeks ended March 31, 2021 and March 25, 2020, we recognized liabilities totaling $ 1,094 and $ 310 , respectively, relating to our obligations under the Tax Receivable Agreement, after concluding that it was probable that we would have sufficient future taxable income over the term of the Tax Receivable Agreement to utilize the related tax benefits.

As of March 31, 2021 and December 30, 2020, our total obligations under the Tax Receivable Agreement were $ 234,048 and $ 232,954 , respectively.

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.

26 | Shake Shack Inc.

Table of Content

RELATED PARTY TRANSACTIONS

8 unchanged sentences

HYC also pays us a percentage of profits on sales of branded beverages, as defined in the MLA.

Thirteen Weeks Ended Thirty-Nine Weeks Ended

Classification September 23

2020 September 25

2019 September 23

2020 September 25

Thirteen Weeks Ended

Classification March 31

2021 March 25

Amounts received from HYC Licensing revenue $ — $ 22

Classification September 23

Classification March 31

2021 December 30

Amounts due from HYC Accounts Receivable $ — $ 8

Shake Shack Inc.

Form 10-Q | 23

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.

Thirteen Weeks Ended Thirty-Nine Weeks Ended

Classification September 23

2020 September 25

2019 September 23

2020 September 25

No amounts were due to MSP Conservancy as of both March 31, 2021 and December 30, 2020.

Thirteen Weeks Ended

Classification March 31

2021 March 25

Amounts paid to MSP Conservancy Occupancy and related expenses $ 215 $ 219

Classification September 23

2020 December 25

Amounts due to MSP Conservancy Accrued expenses $ 249 $ 53

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" 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 shake.

All of the guest donations we collect go directly to Share Our Strength.

Amounts raised through donations during the thirteen weeks ended September 25, 2019, were payable to Share Our Strength as of September 25, 2019.

Thirteen Weeks Ended Thirty-Nine Weeks Ended

Classification September 23

2020 September 25

2019 September 23

2020 September 25

Amounts raised through donations — $ — $ 190 $ — $ 190

Costs incurred for free shakes redeemed General and administrative expenses $ — $ 30 $ — $ 30

Shake Shack Inc.

Form 10-Q | 27

Table of Content

The Chairman of our Board of Directors serves as a director of Olo, Inc.

(formerly known as "Mobo Systems, Inc."), a platform we use in connection with our mobile ordering application.

No amounts were due to Olo as of September 23, 2020 and December 25, 2019, respectively.

Thirteen Weeks Ended Thirty-Nine Weeks Ended

Classification September 23

2020 September 25

2019 September 23

2020 September 25

No amounts were due to Olo as of both March 31, 2021 and December 30, 2020.

Thirteen Weeks Ended

Classification March 31

2021 March 25

Amounts paid to Olo Other operating expenses $ 147 $ 52

1 unchanged sentence

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 locations, sales for certain off-site events and in connection with our kiosk technology.

No amounts were due to Square as of September 23, 2020 and December 25, 2019, respectively.

Thirteen Weeks Ended Thirty-Nine Weeks Ended

Classification September 23

2020 September 25

2019 September 23

2020 September 25

Thirteen Weeks Ended

Classification March 31

2021 March 25

Amounts paid to Square Other operating expenses $ 462 $ 571

Thirteen Weeks Ended

Classification March 31

2021 March 25

Amounts due to Square Accounts Payable $ 9 $ —

USHG Acquisition Corp.

Our Chief Executive Officer has been appointed to the board of directors of USHG Acquisition Corp.

in which the Chairman of our Board of Directors serves as the chairman of the board of directors of USHG Acquisition Corp.

USHG Acquisition Corp.

is a newly organized blank check company incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities.

No amounts were due to or due from USHG Acquisition Corp as of both March 31, 2021 and December 30, 2020.

Tax Receivable Agreement

As described in Note 10, Income Taxes, we entered into a Tax Receivable Agreement with certain members of SSE Holdings that provides for the payment by us of 85 % of the amount of tax benefits, if any, that Shake Shack actually realizes or in some cases is deemed to realize as a result of certain transactions.

Thirteen Weeks Ended Thirty-Nine Weeks Ended

Classification September 23

2020 September 25

2019 September 23

2020 September 25

Shake Shack Inc.

Form 10-Q | 24

Thirteen Weeks Ended

Classification March 31

2021 March 25

Amounts paid to members (inclusive of interest) Other current liabilities $ — $ 6,569

Classification September 23

Classification March 31

2021 December 30

3 unchanged sentences

Under the terms of the SSE Holdings LLC Agreement, SSE Holdings is obligated to make tax distributions to its members.

No tax distributions were payable to non-controlling interest holders as of September 23, 2020 and December 25, 2019, respectively.

Thirteen Weeks Ended Thirty-Nine Weeks Ended

Classification September 23

2020 September 25

2019 September 23

2020 September 25

Amounts paid to non-controlling interest holders Net income attributable to non-controlling interests $ 164 $ 39 $ 478 $ 1,706

Shake Shack Inc.

Form 10-Q | 28

Table of Content

No tax distributions were payable to non-controlling interest holders as of March 31, 2021 and December 30, 2020, respectively.

Thirteen Weeks Ended

Classification March 31

2021 March 25

Amounts paid to non-controlling interest holders Non-controlling interests $ 467 $ 305

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements