Shake Shack 2015 Annual Report Download - page 45

Table of Contents
letters of credit upon our request of up to $10.0 million. Borrowings under the Revolving Credit Facility bear interest at either: (i) LIBOR plus a percentage ranging from 3.0% to 4.0%,
or (ii) the prime rate plus a percentage ranging from 0.0% to 1.0%, depending on the type of borrowing made under the Revolving Credit Facility. As of December 25, 2013
, there
were no amounts outstanding under the Revolving Credit Facility. As of December 31, 2014
, there was $32.0 million of outstanding borrowings under the Revolving Credit Facility,
classified as short-term debt on the Consolidated Balance Sheet, which carried interest at a weighted-average rate of 3.3%. We had $17.9 million of availability as of
December 31,
2014 , after giving effect to $0.1 million in letters of credit.
The Revolving Credit Facility is secured by a first-priority security interest in substantially all of our assets and is guaranteed by Union Square Hospitality Group, LLC (" USHG ").
The Revolving Credit Facility contains a number of covenants that, among other things, restrict our ability to, subject to, specified exceptions, incur additional debt; incur additional
liens and contingent liabilities; sell or dispose of assets; merge with or acquire other companies; liquidate or dissolve ourselves; pay dividends or make distributions; engage in
businesses that are not in a related line of business; make loans, advances or guarantees; engage in transactions with affiliates; and make investments. In addition, the Revolving Credit
Facility contains certain cross-default provisions. We are required to maintain a specified consolidated fixed-
charge coverage ratio and a specified funded net debt to Adjusted EBITDA
Ratio. As of December 31, 2014 , we were in compliance with all covenants.
On January 28, 2015, we executed a Third Amended and Restated Credit Agreement, which became effective on February 4, 2015 (the " New Revolving Credit Facility
"). The New
Revolving Credit Facility provides for, among other things, (i) a revolving total commitment amount of $50.0 million, of which $20.0 million is available immediately, with the
remainder available at our request and the consent of the lenders under the New Revolving Credit Facility; (ii) the removal of USHG as guarantor of the facility; (iii) the elimination of
the mandatory $15.0 million prepayment and (iv) a reduction in certain interest rates and fees. Borrowings under the New Revolving Credit Facility will bear interest at either:
(x) LIBOR plus a percentage ranging from 2.5% to 3.5% or (y) the prime rate plus a percentage ranging from 0.0% to 1.0%, depending on the type of borrowing to be made under the
New Revolving Credit Facility.
CONTRACTUAL OBLIGATIONS
The following table sets forth certain contractual obligations as of December 31, 2014
and the timing and effect that such commitments are expected to have on our liquidity and capital
requirements in future periods.
Purchase obligations include all legally binding contracts, including commitments for the purchase, construction or remodeling of real estate and facilities, firm minimum commitments
for inventory purchases, equipment purchases, marketing-related contracts, software acquisition/license commitments and service contracts.
The above table excludes long-
term, exclusive contracts we enter into with certain vendors to supply us with food, beverages and paper goods, obligating us to purchase specified
quantities. These volume commitments are not subject to any time limit and there are no material financial penalties associated with these agreements in the event of early termination.
Other long-term liabilities excluded from the above table include non-
cash obligations for deferred rent and deferred property incentives. In addition, other unrecorded obligations that
have been excluded from the contractual obligations table include contingent rent payments, property taxes, insurance payments and common area maintenance costs.
OFF-BALANCE SHEET ARRANGEMENTS
Except for operating leases entered into in the normal course of business, certain letters of credit entered into as security under the terms of several of our leases and the unrecorded
contractual obligations set forth above, we did not have any off-balance sheet arrangements as of December 31, 2014 .
44
Total
Less than
1 Year
1-3
Years
3-5
Years
More Than
5 Years
Operating lease obligations
$
166,037
$
10,690
$
27,211
$
29,043
$
99,093
Short-term borrowings
32,000
32,000
— — —
Purchase obligations
12,567
10,785
1,782
— —
Deferred compensation
2,450
— —
2,450
—
Long-term debt
313
— — —
313
TOTAL
$
213,367
$
53,475
$
28,993
$
31,493
$
99,406