Shake Shack 2016 Annual Report Download - page 91

Table of Contents
Member Distributions
On December 15, 2014, the Board of Directors of SSE Holdings approved a special distribution to its members, to the extent the gross proceeds from the IPO
exceeded the anticipated gross proceeds (including as a result of the exercise by the underwriters of their option to purchase additional shares of Class A common
stock), in an amount equal to the product of (i) the increased gross proceeds and (ii) 0.273 , to be paid from the proceeds of the IPO (the "Special Distribution").
On February 4, 2015, SSE Holdings paid the Additional Distribution to certain of the Original SSE Equity Owners in the amount of $11,125 .
Dividend Restrictions
We are a holding company with no direct operations. As a result, our ability to pay cash dividends on our common stock, if any, is dependent upon cash dividends,
distributions or other transfers from SSE Holdings. The amounts available to us to pay cash dividends are subject to certain covenants and restrictions set forth in
the Revolving Credit Facility. As of December 30, 2015 , essentially all of the net assets of SSE Holdings were restricted. See Note 8 for more information
regarding the covenants and restrictions set forth in the Revolving Credit Facility.
NOTE 12 : NON-CONTROLLING INTERESTS
In connection with the Organizational Transactions described in Note 1, we became the sole managing member of SSE Holdings and, as a result, consolidate the
financial results of SSE Holdings. We report a non-controlling interest representing the LLC Interests in SSE Holdings held by Continuing SSE Equity Owners.
Changes in our ownership interest in SSE Holdings while we retain our controlling interest in SSE Holdings will be accounted for as equity transactions. As such,
future redemptions or direct exchanges of LLC Interests in SSE Holdings by the Continuing SSE Equity Owners will result in a change in ownership and reduce
the amount recorded as non-controlling interest and increase additional paid-in capital.
On February 4, 2015, we used the net proceeds from our IPO to purchase 5,750,000 newly-issued LLC Interests. Additionally, in connection with the
Organizational Transactions, we acquired 5,968,841 LLC Interests. Pursuant to the LLC Agreement, we received 339,306 LLC Interests as a result of the issuance
of 339,306 shares of Class A common stock in settlement of the outstanding UARs.
During fiscal 2015 , an aggregate of 6,003,308 LLC Interests were redeemed by the Continuing SSE Equity Owners (including 3,155,273 LLC Interests redeemed
in connection with the secondary offering) for newly-issued shares of Class A common stock, and we received 6,003,308 LLC Interests, increasing our total
ownership interest in SSE Holdings.
In December 2015, we received 1,727,804 LLC Interests in connection with the USC Merger in exchange for an equivalent number of newly-issued shares of
Class A common stock. See Note 1 for more information.
As of December 30, 2015 , there were 36,250,000 LLC Interests outstanding, of which we owned 19,789,259 LLC Interests, representing a 54.6% ownership
interest in SSE Holdings.
89 | Shake Shack Inc. Form 10-K