What changed in this filing

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Item 1. Financial Statements

2025-08-08 compared with 2025-05-09 · 513 added, 113 removed, 486 unchanged (56% of the section changed)

20 unchanged sentences

Accounts payable and accrued expenses $ 56,418 $ 63,381

Loss and loss adjustment expenses 17,982 17,250

Losses and loss adjustment expenses 17,203 17,250

Unearned premiums 18,412 17,236

3 unchanged sentences

Lease obligations 91,384 90,739

Line of credit 13,400 10,000

Deferred taxes 40,768 29,393

Line of credit — 10,000

Asset retirement obligations 15,549 15,218

14 unchanged sentences

(dollars in thousands except per share amounts)

First Quarter

Second Quarter First Six Months

2025 2024 2025 2024

(Unaudited) (Unaudited)

Restaurant operations $ 72,011 $ 64,475 $ 136,360 $ 126,471

13 unchanged sentences

Interest expense on leases 1,240 1,349 2,573 2,663

Interest expense on debt 900 —

Interest expense on borrowings 852 42 1,752 42

Total costs and expenses 96,946 71,437 181,987 155,191

1 unchanged sentence

Investment partnership gains (losses) 58,504 ( 79,890 ) 8,912 ( 57,905 )

Total other income (expense) ( 51,177 ) 23,698

Total other income (expenses) 61,429 ( 82,619 ) 10,252 ( 58,921 )

Earnings (loss) before income taxes 65,102 ( 62,915 ) 23,919 ( 33,520 )

2 unchanged sentences

Net earnings (loss) per average equivalent Class A share * $ 194.57 $ ( 171.89 ) $ 67.26 $ ( 90.80 )

* Net earnings (loss) per average equivalent Class B share outstanding are one-fifth of the average equivalent Class A share or $( 25.28 ) for the first quarter of 2025 and $ 15.91 for the first quarter of 2024.

*Net earnings (loss) per average equivalent Class B share outstanding are one-fifth of the average equivalent Class A share or $ 38.91 and $ 13.45 for the second quarter and first six months of 2025, respectively, and $( 34.38 ) and $( 18.16 ) for the second quarter and first six months of 2024, respectively.

See accompanying Notes to Consolidated Financial Statements.

2 unchanged sentences

(dollars in thousands)

First Quarter

Second Quarter First Six Months

2025 2024 2025 2024

(Unaudited) (Unaudited)

Net earnings (loss) $ 50,931 $ ( 48,190 ) $ 17,656 $ ( 25,611 )

Foreign currency translation 1,010 ( 118 ) 1,480 ( 149 )

Total comprehensive income (loss) $ ( 32,805 ) $ 22,548

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(dollars in thousands)

Stock Additional Paid-In

Capital Retained

Earnings Accumulated

Comprehensive

Income (Loss) Treasury

For the first quarter of 2025

Balance at December 31, 2024 $ 1,138 $ 385,594 $ 627,699 $ ( 2,872 ) $ ( 438,598 ) $ 572,961

Net earnings (loss) ( 33,275 ) ( 33,275 )

Other comprehensive income (loss) 470 470

Adjustment for holdings in investment partnerships ( 320 ) ( 320 )

Balance at March 31, 2025 $ 1,138 $ 385,594 $ 594,424 $ ( 2,402 ) $ ( 438,918 ) $ 539,836

For the first quarter of 2024

Balance at December 31, 2023 $ 1,138 $ 385,594 $ 631,458 $ ( 2,518 ) $ ( 416,342 ) $ 599,330

Net earnings 22,579 22,579

Other comprehensive income (loss) ( 31 ) ( 31 )

Adjustment for holdings in investment partnerships ( 3,306 ) ( 3,306 )

Balance at March 31, 2024 $ 1,138 $ 385,594 $ 654,037 $ ( 2,549 ) $ ( 419,648 ) $ 618,572

Comprehensive income (loss) $ 51,941 $ ( 48,308 ) $ 19,136 $ ( 25,760 )

See accompanying Notes to Consolidated Financial Statements.

2 unchanged sentences

(dollars in thousands)

First Quarter

First Six Months

Operating activities

1 unchanged sentence

Adjustments to reconcile net earnings (loss) to operating cash flows:

Depreciation and amortization 10,257 10,053

Depreciation, depletion, and amortization 20,529 19,175

Provision for deferred income taxes 11,254 ( 11,656 )

1 unchanged sentence

Gains on sale of assets ( 11,032 ) ( 19,618 )

Investment and investment partnerships (gains) losses 51,177 ( 23,698 )

Investment and investment partnership gains and losses ( 10,252 ) 58,921

Distributions from investment partnerships 35,000 1,000

Changes in receivables and inventories 1,606 ( 2,249 )

Changes in receivables, inventories and other assets 559 1,234

Changes in accounts payable and accrued expenses ( 7,023 ) ( 3,642 )

8 unchanged sentences

Financing activities

Payments on line of credit ( 9,600 ) —

Proceeds from line of credit 27,000 6,050

Payments on line of credit ( 53,000 ) ( 6,000 )

Principal payments on direct financing lease obligations ( 2,778 ) ( 2,741 )

Net cash provided by (used in) financing activities 2,002 ( 1,403 )

Effects of foreign currency exchange rate changes 40 ( 10 )

Net cash used in financing activities ( 28,778 ) ( 2,691 )

Effect of exchange rate changes on cash 42 ( 7 )

Increase (decrease) in cash, cash equivalents and restricted cash 2,045 ( 1,374 )

Cash, cash equivalents and restricted cash at beginning of year 31,432 29,654

Cash, cash equivalents and restricted cash at end of first quarter $ 29,375 $ 36,124

First Quarter

Cash, cash equivalents and restricted cash at end of second quarter $ 33,477 $ 28,280

Cash and cash equivalents $ 32,766 $ 26,897

Restricted cash in other long-term assets 711 1,383

Cash, cash equivalents and restricted cash at end of first quarter $ 29,375 $ 36,124

Cash, cash equivalents and restricted cash at end of second quarter $ 33,477 $ 28,280

See accompanying Notes to Consolidated Financial Statements.

BIGLARI HOLDINGS INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(dollars in thousands)

Stock Additional Paid-In

Capital Retained

Earnings Accumulated Other Comprehensive Income (Loss) Treasury

For the second quarter and first six months of 2025

Balance at December 31, 2024 $ 1,138 $ 385,594 $ 627,699 $ ( 2,872 ) $ ( 438,598 ) $ 572,961

Net earnings (loss) ( 33,275 ) ( 33,275 )

Other comprehensive loss 470 470

Adjustment for holdings in investment partnerships ( 320 ) ( 320 )

Balance at March 31, 2025 $ 1,138 $ 385,594 $ 594,424 $ ( 2,402 ) $ ( 438,918 ) $ 539,836

Net earnings (loss) 50,931 50,931

Other comprehensive loss 1,010 1,010

Adjustment for holdings in investment partnerships ( 2,491 ) ( 2,491 )

Balance at June 30, 2025 $ 1,138 $ 385,594 $ 645,355 $ ( 1,392 ) $ ( 441,409 ) $ 589,286

For the second quarter and first six months of 2024

Balance at December 31, 2023 $ 1,138 $ 385,594 $ 631,458 $ ( 2,518 ) $ ( 416,342 ) $ 599,330

Net earnings (loss) 22,579 22,579

Other comprehensive income ( 31 ) ( 31 )

Adjustment for holdings in investment partnerships ( 3,306 ) ( 3,306 )

Balance at March 31, 2024 $ 1,138 $ 385,594 $ 654,037 $ ( 2,549 ) $ ( 419,648 ) $ 618,572

Net earnings (loss) ( 48,190 ) ( 48,190 )

Other comprehensive loss ( 118 ) ( 118 )

Adjustment for holdings in investment partnerships ( 1,085 ) ( 1,085 )

Balance at June 30, 2024 $ 1,138 $ 385,594 $ 605,847 $ ( 2,667 ) $ ( 420,733 ) $ 569,179

See accompanying Notes to Consolidated Financial Statements.

BIGLARI HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

(dollars in thousands, except share and per share data)

14 unchanged sentences

All major investment and capital allocation decisions are made for the Company and its subsidiaries by Mr.

As of March 31, 2025, Mr.

As of June 30, 2025, Mr.

Biglari beneficially owns shares of the Company that represent approximately 74.3 % of the voting interest.

4 unchanged sentences

Earnings per share of common stock is based on the weighted average number of shares outstanding during the year.

The shares of Company stock attributable to our limited partner interest in The Lion Fund, L.P., and The Lion Fund II, L.P.

(collectively, the “investment partnerships”) — based on our proportional ownership during this period — are considered treasury stock on the consolidated balance sheet and thereby deemed not to be included in the calculation of weighted-average common shares outstanding.

The shares of Company stock attributable to our limited partner interest in The Lion Fund, L.P., and The Lion Fund II, L.P., (collectively, the “investment partnerships”) — based on our proportional ownership during this period — are considered treasury stock on the consolidated balance sheet and thereby deemed not to be included in the calculation of weighted average common shares outstanding.

However, these shares are legally outstanding.

The following table presents shares authorized, issued, and outstanding on March 31, 2025 and December 31, 2024.

March 31, 2025 December 31, 2024

Earnings Per Share (continued)

The following table presents shares authorized, issued and outstanding on June 30, 2025 and December 31, 2024.

June 30, 2025 December 31, 2024

Class A Class B Class A Class B

1 unchanged sentence

Common stock issued and outstanding 206,864 2,068,640 206,864 2,068,640

Earnings Per Share (continued)

The Company has applied the “two-class method” of computing earnings per share as prescribed in Accounting Standards Codification (“ASC”) 260, “ Earnings Per Share ”.

1 unchanged sentence

In the tabulation below is the weighted average equivalent Class A common stock for earnings per share.

March 31, 2025 March 31, 2024

Second Quarter First Six Months

2025 2024 2025 2024

Equivalent Class A common stock outstanding 620,592 620,592 620,592 620,592

6 unchanged sentences

However, we consider investment gains and losses, whether realized or unrealized, as non-operating.

Investment losses for the first quarter of 2025 were $ 1,585 and investment gains for the first quarter of 2024 were $ 1,713 .

Investment gains for the second quarter and first six months of 2025 were $ 2,925 and $ 1,340 , respectively.

Investment losses in the second quarter and first six months of 2024 were $ 2,729 and $ 1,016 , respectively.

Investment Partnerships

11 unchanged sentences

The lock-up period can be waived by the general partner in its sole discretion.

Investment Partnerships (continued)

The fair value and adjustment for Company common stock held by the investment partnerships to determine the carrying value of our partnership interest are presented below.

3 unchanged sentences

Investment partnership gains (losses) 68,515 59,603 8,912

Contributions (net of distributions) 17,320 17,320

Distributions (net of contributions) ( 4,935 ) ( 4,935 )

Changes in proportionate share of Company stock held 2,811 ( 2,811 )

Partnership interest at March 31, 2025 $ 558,147 $ 389,012 $ 169,135

Investment Partnerships (continued)

Partnership interest at June 30, 2025 $ 719,846 $ 516,953 $ 202,893

Fair Value Company

4 unchanged sentences

Changes in proportionate share of Company stock held 4,391 ( 4,391 )

Partnership interest at March 31, 2024 $ 544,909 $ 324,152 $ 220,757

Partnership interest at June 30, 2024 $ 482,051 $ 323,320 $ 158,731

The carrying value of the investment partnerships net of deferred taxes is presented below.

3 unchanged sentences

Carrying value of investment partnerships net of deferred taxes $ 172,863 $ 184,472

We expect that a majority of the $ 9,564 and $ 17,255 deferred tax liabilities enumerated above will not become due until the dissolution of the investment partnerships.

The Company’s proportionate share of Company stock held by investment partnerships at cost was $ 438,918 and $ 438,598 as of March 31, 2025, and December 31, 2024, respectively.

We expect that a majority of the $ 30,030 deferred tax liability enumerated above will not become due until the dissolution of the investment partnerships.

The Company’s proportionate share of Company stock held by investment partnerships at cost was $ 441,409 and $ 438,598 at June 30, 2025 and December 31, 2024, respectively.

The carrying value of the partnership interest approximates fair value adjusted by the value of held Company stock.

2 unchanged sentences

Gains/losses from investment partnerships recorded in the Company’s consolidated statements of earnings are presented below.

First Quarter

Second Quarter First Six Months

2025 2024 2025 2024

Gains (losses) from investment partnerships $ 58,504 $ ( 79,890 ) $ 8,912 $ ( 57,905 )

Tax expense (benefit) 12,310 ( 19,142 ) 2,144 ( 14,305 )

Contribution to net earnings $ ( 39,426 ) $ 17,148

Contribution to net earnings (loss) $ 46,194 $ ( 60,748 ) $ 6,768 $ ( 43,600 )

On December 31 of each year, the general partner of the investment partnerships, Biglari Capital Corp., will earn an incentive reallocation fee for the Company’s investments equal to 25 % of the net profits above an annual hurdle rate of 6 % over the previous high-water mark.

3 unchanged sentences

Gains and losses on the Company’s common stock and the related incentive reallocations are eliminated in our financial statements.

There were no incentive reallocations accrued during the first quarters of 2025 and 2024.

There were no incentive reallocations accrued during the first six months of 2025 and 2024.

Investment Partnerships (continued)

Summarized financial information for The Lion Fund, L.P., and The Lion Fund II, L.P., is presented below.

Summarized financial information for The Lion Fund, L.P.

and The Lion Fund II, L.P.

is presented below.

Equity in Investment Partnerships

Lion Fund Lion Fund II

Total assets as of March 31, 2025 $ 481,961 $ 326,220

Total liabilities as of March 31, 2025 $ 18,613 $ 182,666

Revenue for the first quarter of 2025 $ ( 84,132 ) $ ( 40,875 )

Earnings for the first quarter of 2025 $ ( 84,439 ) $ ( 43,373 )

Biglari Holdings’ ownership interest as of March 31, 2025 91.1 % 89.5 %

Total assets as of June 30, 2025 $ 623,894 $ 365,151

Total liabilities as of June 30, 2025 $ 15,173 $ 178,988

Revenue for the first six months of 2025 $ 58,537 $ 23,257

Earnings for the first six months of 2025 $ 57,970 $ 18,396

Biglari Holdings’ ownership interest as of June 30, 2025 91.6 % 87.8 %

Total assets as of December 31, 2024 $ 567,387 $ 367,630

Total liabilities as of December 31, 2024 $ 20,609 $ 188,202

Revenue for the first quarter of 2024 $ 50,262 $ 31,118

Earnings for the first quarter of 2024 $ 49,820 $ 28,237

Biglari Holdings’ ownership interest as of March 31, 2024 89.9 % 86.3 %

Revenue for the first six months of 2024 $ 33,316 $ ( 42,355 )

Earnings for the first six months of 2024 $ 32,417 $ ( 48,207 )

Biglari Holdings’ ownership interest as of June 30, 2024 90.2 % 87.3 %

Revenue in the financial information of the investment partnerships, summarized above, includes investment income and unrealized gains and losses on investments.

11 unchanged sentences

Property and equipment, net $ 365,262 $ 376,155

Depletion expense related to oil and gas properties was $ 3,058 and $ 2,568 during the first quarter of 2025 and 2024, respectively.

The Company recorded no impairment to restaurant long-lived assets in the first quarter of 2025 and $ 107 in the first quarter of 2024 related to underperforming stores.

We did not record any impairments to our oil and gas assets during the first quarter of 2025 and 2024.

Depletion expense related to oil and gas properties was $ 5,966 and $ 4,227 during the first six months of 2025 and 2024, respectively.

The Company recorded an impairment to restaurant long-lived assets related to underperforming stores of $ 1,251 in the second quarter of 2025.

No impairment was recorded in the second quarter of 2024.

The Company recorded an impairment to restaurant long-lived assets related to underperforming stores of $ 1,251 and $ 107 in the first six months of 2025 and 2024, respectively.

We did not record any impairments to our oil and gas assets during the second quarter and first six months of 2025 and 2024.

However, if commodity prices fall below current levels, we may be required to record impairments in future periods and such impairments could be material.

Further, if commodity prices decrease, our production, proved reserves, and cash flows will be adversely impacted.

Abraxas Petroleum recorded gains of $ 9,323 and $ 481 during the first quarter of 2025 and 2024, respectively, as result of selling undeveloped reserves.

Abraxas Petroleum recorded gains of $ 794 and $ 16,165 during the second quarter of 2025 and 2024, respectively, and recorded gains of $ 10,117 and $ 16,646 during the first six months of 2025 and 2024, respectively, as a result of selling undeveloped reserves.

Abraxas may receive future royalties for each of these transactions as the reserves are developed by the respective unaffiliated parties.

Property and Equipment (continued)

Property and equipment held for sale of $ 2,428 and $ 1,081 are recorded in other current assets as of March 31, 2025 and December 31, 2024, respectively.

Property and equipment held for sale of $ 3,820 and $ 1,081 are recorded in other assets as of June 30, 2025 and December 31, 2024, respectively.

The assets classified as held for sale include properties which were previously company-operated restaurants.

During the first quarter of 2025 and 2024, the Company recognized net gains of $ 262 and $ 767 , respectively, in connection with property sales, lease terminations, and asset disposals which are included in selling, general and administrative expenses in the consolidated statements of earnings.

During the first six months of 2025 and 2024, the Company recognized net gains of $ 807 and $ 2,909 , respectively, in connection with property sales, lease terminations and asset disposals which are included in selling, general and administrative expenses in the consolidated statements of earnings.

Goodwill and Other Intangible Assets

3 unchanged sentences

Goodwill $ 53,796

Accumulated impairment losses ( 1,300 )

Change in foreign exchange rates during the first quarter of 2025 23

Goodwill at March 31, 2025

Impairments prior to 2025 ( 1,300 )

Change in foreign exchange rates during the first six months of 2025 72

Goodwill at June 30, 2025

Goodwill and indefinite-lived intangible asset impairment reviews include determining the estimated fair values of our reporting units and indefinite-lived intangible assets.

4 unchanged sentences

If the carrying value of a reporting unit exceeds the estimated fair value of the reporting unit, then the excess, limited to the carrying amount of goodwill, will be charged to earnings as an impairment loss.

There was no impairment recorded for goodwill during the first quarters of 2025 or 2024.

There was no impairment recorded by Steak n Shake for goodwill during the first six months of 2025 or 2024.

We perform our annual assessment of our recoverability of goodwill related to Western Sizzlin during the second quarter.

We did not record an impairment for goodwill during 2025.

An impairment to goodwill of $ 1,000 was recorded in 2024.

There was no impairment recorded for intangible assets during the first six months of 2025 and 2024.

Other Intangible Assets

3 unchanged sentences

Intangibles $ 15,876 $ 10,692 $ 26,568

Accumulated impairment losses — ( 3,748 ) ( 3,748 )

Impairments prior to 2025 — ( 3,748 ) ( 3,748 )

15,876 6,944 22,820

Change in foreign exchange rates during the first quarter of 2025 — 274 274

Balance at March 31, 2025

Change in foreign exchange rates during the first six months of 2025 — 856 856

Balance at June 30, 2025

$ 15,876 $ 7,800 $ 23,676

1 unchanged sentence

Restaurant operations revenues were as follows.

First Quarter

Second Quarter First Six Months

2025 2024 2025 2024

Net sales $ 46,858 $ 40,815 $ 88,473 $ 79,550

14 unchanged sentences

Both real estate and equipment rental payments are charged to franchise partners and are recognized in accordance with ASC 842, “ Leases ”.

During the first quarter of 2025 and 2024, restaurant operations recognized $ 5,553 and $ 5,705 , respectively, in franchise partner fees related to rental income.

During the second quarter of 2025 and 2024, restaurant operations recognized $ 5,887 and $ 5,780 , respectively, in franchise partner fees related to rental income.

During the first six months ended June 30, 2025 and June 30, 2024, restaurant operations recognized $ 11,440 and $ 11,485 , respectively, in franchise partner fees related to rental income.

Franchise Royalties and Fees

27 unchanged sentences

The line of credit includes customary covenants, as well as financial maintenance covenants.

There was a $ 35,000 balance on the line of credit on March 31, 2025 and December 31, 2024.

Our interest rate was 7.1 % on March 31, 2025 and December 31, 2024.

There was a $ 19,000 and $ 35,000 balance on the line of credit on June 30, 2025 and December 31, 2024, respectively.

Our interest rate was 7.1 % on June 30, 2025 and December 31, 2024.

On November 8, 2024, Biglari Holdings entered into a line of credit in an aggregate principal amount of up to $ 75,000 .

1 unchanged sentence

The line of credit includes customary covenants as well as financial maintenance covenants.

There was a $ 13,400 and $ 10,000 balance on the line of credit on March 31, 2025 and December 31, 2024, respectively.

Our interest rate was 7.5 % and 7.8 % on March 31, 2025 and December 31, 2024, respectively.

There was a $ 10,000 balance on the line of credit on December 31, 2024.

Our interest rate was 7.8 % on December 31, 2024.

As of June 30, 2025, Biglari Holdings had no debt outstanding on its line of credit.

Western Sizzlin Revolver

Western Sizzlin’s available line of credit is $ 500 .

As of March 31, 2025 and December 31, 2024, Western Sizzlin had no debt outstanding under its revolver.

Unpaid Loss and Loss Adjustment Expenses

As of June 30, 2025 and December 31, 2024, there was no debt outstanding under its revolver.

Unpaid Losses and Loss Adjustment Expenses

Our liabilities for unpaid losses and loss adjustment expenses (also referred to as “claim liabilities”) under insurance contracts are based upon estimates of the ultimate claim costs associated with claim occurrences as of the balance sheet date and include estimates for incurred-but-not-reported (“IBNR”) claims.

A reconciliation of the changes in claim liabilities, net of reinsurance, for each of the three-month periods ended March 31, 2025 and 2024 follows.

March 31, March 31,

A reconciliation of the changes in claim liabilities, net of reinsurance, for each of the six-month periods ended June 30, 2025 and 2024 follows.

2025 June 30,

Balances at beginning of year:

10 unchanged sentences

Total 24,513 21,682

Balances at March 31:

Balances at June 30:

Net liabilities 17,203 15,695

1 unchanged sentence

Gross liabilities $ 17,815 $ 15,967

We recorded net increases of estimated ultimate liabilities for prior accident years of $ 189 in the first quarter of 2025 and net reductions of estimated ultimate liabilities for prior accident years of $ 3,319 in the first quarter of 2024, which produced corresponding changes in incurred losses and loss adjustment expenses in those periods.

We recorded net increases of $ 872 for estimated ultimate liabilities for prior accident years in the first six months of 2025, and net reductions of $ 1,330 in the first six months of 2024.

These changes as a percentage of the net liabilities at the beginning of each year were 5.1 % in 2025 and 8.8 % in 2024.

1 unchanged sentence

Lease obligations include the following.

Current portion of lease obligations March 31,

Current portion of lease obligations June 30,

2025 December 31,

8 unchanged sentences

Total long-term lease obligations $ 91,384 $ 90,739

Lease Assets and Obligations (continued)

Nature of Leases

1 unchanged sentence

In addition, they own sites and lease sites from third parties that are leased and/or subleased to franchisees.

Lease Assets and Obligations (continued)

A significant portion of our operating and finance lease portfolio includes restaurant locations.

2 unchanged sentences

Total lease cost consists of the following.

First Quarter

Second Quarter First Six Months

2025 2024 2025 2024

Finance lease costs:

5 unchanged sentences

Supplemental cash flow information related to leases is as follows.

First Quarter

First Six Months

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

14 unchanged sentences

Lease Assets and Obligations (continued)

Maturities of lease liabilities as of March 31, 2025 are as follows.

Maturities of lease liabilities as of June 30, 2025 are as follows.

Year Operating

9 unchanged sentences

Total lease liabilities $ 37,532 $ 5,206

The components of lease income are as follows.

First Quarter

The components of lease income recorded in restaurant operations are as follows.

Second Quarter First Six Months

2025 2024 2025 2024

Operating lease income $ 3,914 $ 4,236 $ 7,846 $ 8,417

1 unchanged sentence

Total lease income $ 6,202 $ 6,060 $ 12,034 $ 12,040

The following table displays the Company’s future minimum rental receipts for non-cancelable leases and subleases as of March 31, 2025.

The following table displays the Company’s future minimum rental receipts for non-cancelable leases and subleases as of June 30, 2025.

Franchise partner leases and subleases are short-term leases and have been excluded from the table.

4 unchanged sentences

Total future minimum receipts $ 2,106 $ 6,452

In determining the quarterly provision for income taxes, the Company used an estimated annual effective tax rate for the first quarter of 2025 and 2024.

In determining the quarterly provision for income taxes, the Company used an estimated annual effective tax rate for the first six months of 2025 and 2024.

Our periodic effective income tax rate is affected by the relative mix of pre-tax earnings or losses and underlying income tax rates applicable to the various taxing jurisdictions.

Income tax benefit for the first quarter of 2025 was $ 7,908 compared to income tax expense of $ 6,816 for the first quarter of 2024.

The variance in income taxes between 2025 and 2024 is primarily attributable to taxes on income generated by the investment partnerships.

Investment partnership pre-tax losses were $ 49,592 during the first quarter of 2025 compared to pre-tax gains of $ 21,985 during the first quarter of 2024.

Income tax expense for the second quarter of 2025 was $ 14,171 compared to an income tax benefit of $ 14,725 for the second quarter of 2024.

Income tax expense for the first six months of 2025 was $ 6,263 compared to an income tax benefit of $ 7,909 for the first six months of 2024.

The variance in income taxes between 2025 and 2024 is attributable to taxes on income generated by the investment partnerships.

Investment partnership pre-tax gains were $ 58,504 during the second quarter of 2025 compared to pre-tax losses of $ 79,890 during the second quarter of 2024.

Investment partnership pre-tax gains were $ 8,912 during the first six months of 2025 compared to pre-tax losses of $ 57,905 during the first six months of 2024.

Income Taxes (continued)

The One Big Beautiful Bill Act was signed into law on July 4, 2025.

The new Act makes permanent certain expiring provisions of the Tax Cuts and Jobs Act and restores favorable tax treatment for certain business provisions including 100% bonus depreciation and the business interest expense limitation.

Commitments and Contingencies

24 unchanged sentences

Fair Value of Financial Assets (continued)

As of March 31, 2025, and December 31, 2024, the fair values of financial assets were as follows.

March 31, 2025 December 31, 2024

As of June 30, 2025 and December 31, 2024, the fair values of financial assets were as follows.

June 30, 2025 December 31, 2024

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

11 unchanged sentences

Biglari Enterprises is owned by Mr.

The Company paid Biglari Enterprises $ 2,850 and $ 2,400 in service fees during the first quarter of 2025 and 2024, respectively.

The Company paid Biglari Enterprises $ 5,700 in service fees during the first six months of 2025 and $ 4,800 during the first six months of 2024.

The service agreement does not alter the hurdle rate connected with the incentive reallocation paid to Biglari Capital Corp.

20 unchanged sentences

For most non-insurance businesses, pre-tax earnings are considered in allocating resources and capital.

A disaggregation of our consolidated data for the first quarters of 2025 and 2024 is presented in the tables which follow.

A disaggregation of our consolidated data for the second quarters and first six months of 2025 and 2024 is presented in the tables which follow.

Second Quarter

Steak n Shake Western Sizzlin Total Restaurants

Revenue $ 69,258 $ 2,753 $ 72,011

Cost and expenses:

Cost of food 13,241 926 14,167

Labor costs 13,366 654 14,020

Occupancy and other 11,985 1,107 13,092

Selling, general and administrative 16,390 44 16,434

Depreciation, amortization and impairment 7,844 19 7,863

Total costs and expenses 62,826 2,750 65,576

Earnings before income taxes $ 6,432 $ 3 $ 6,435

Second Quarter

Steak n Shake Western Sizzlin Total Restaurants

Revenue $ 61,711 $ 2,764 $ 64,475

Cost and expenses:

Cost of food 11,457 900 12,357

Labor costs 12,078 914 12,992

Occupancy and other 12,330 556 12,886

Selling, general and administrative 13,544 121 13,665

Depreciation, amortization and impairment 6,793 17 6,810

Total costs and expenses 56,202 2,508 58,710

Earnings before income taxes $ 5,509 $ 256 $ 5,765

Business Segment Reporting (continued)

First Quarter

First Six Months

Steak n Shake Western Sizzlin Total Restaurants

8 unchanged sentences

Earnings before income taxes $ 9,520 $ 229 $ 9,749

First Quarter

First Six Months

Steak n Shake Western Sizzlin Total Restaurants

8 unchanged sentences

Earnings before income taxes $ 9,746 $ 897 $ 10,643

First Quarter

Second Quarter

First Guard Southern Pioneer Total Underwriting Investment Income Other Total Insurance

7 unchanged sentences

Business Segment Reporting (continued)

First Quarter

Second Quarter

First Guard Southern Pioneer Total Underwriting Investment Income Other Total Insurance

6 unchanged sentences

Earnings before income taxes $ 1,331 $ ( 785 ) $ 546 $ 955 $ 349 $ 1,850

First Six Months

First Guard Southern Pioneer Total Underwriting Investment Income Other Total Insurance

Revenue $ 18,307 $ 16,624 $ 34,931 $ 1,676 $ 1,565 $ 38,172

Cost and expenses:

Insurance losses 10,906 12,771 23,677 — — 23,677

Underwriting expenses 4,095 5,212 9,307 — — 9,307

Other segment items — — — — 1,858 1,858

Total costs and expenses 15,001 17,983 32,984 — 1,858 34,842

Earnings before income taxes $ 3,306 $ ( 1,359 ) $ 1,947 $ 1,676 $ ( 293 ) $ 3,330

First Six Months

First Guard Southern Pioneer Total Underwriting Investment Income Other Total Insurance

Revenue $ 18,804 $ 13,409 $ 32,213 $ 1,870 $ 1,344 $ 35,427

Cost and expenses:

Insurance losses 12,936 8,904 21,840 — — 21,840

Underwriting expenses 3,737 5,231 8,968 — — 8,968

Other segment items — — — — 523 523

Total costs and expenses 16,673 14,135 30,808 — 523 31,331

Earnings before income taxes $ 2,131 $ ( 726 ) $ 1,405 $ 1,870 $ 821 $ 4,096

Other segment items include general and administrative costs, depreciation, and other income.

Oil and Gas First Quarter

Business Segment Reporting (continued)

Oil and Gas Second Quarter

Abraxas Petroleum Southern Oil Total

7 unchanged sentences

Earnings before income taxes $ 367 $ 750 $ 1,117

First Quarter

Second Quarter

Abraxas Petroleum Southern Oil Total

7 unchanged sentences

Earnings before income taxes $ 17,414 $ ( 63 ) $ 17,351

First Six Months

Abraxas Petroleum Southern Oil Total

Revenue $ 10,051 $ 7,377 $ 17,428

Cost and expenses:

Production costs 4,541 2,385 6,926

Depreciation, depletion and accretion 3,710 2,657 6,367

General and administrative 1,365 1,122 2,487

Total costs and expenses 9,616 6,164 15,780

Gains on sales of properties 10,117 — 10,117

Earnings before income taxes $ 10,552 $ 1,213 $ 11,765

Business Segment Reporting (continued)

First Quarter

First Six Months

Abraxas Petroleum Southern Oil Total

Revenue $ 10,860 $ 7,321 $ 18,181

Cost and expenses:

Production costs 5,085 3,696 8,781

Depreciation, depletion and accretion 2,328 2,342 4,670

General and administrative 1,292 1,267 2,559

Total costs and expenses 8,705 7,305 16,010

Gains on sales of properties 16,646 — 16,646

Earnings before income taxes $ 18,801 $ 16 $ 18,817

Brand Licensing Maxim

Second Quarter First Six Months

2025 2024 2025 2024

Revenue $ 2,287 $ 301 $ 3,694 $ 513

Cost and expenses:

Licensing and media cost 2,421 523 4,072 1,026

3 unchanged sentences

Earnings before income taxes $ ( 267 ) $ ( 255 ) $ ( 624 ) $ ( 609 )

Reconciliation of revenues and earnings (loss) before income taxes of our business segments to the consolidated amounts for each of the three months ended March 31 follows.

Reconciliation of revenues and earnings (loss) before income taxes of our business segments to the consolidated amounts for each of the three months and six months ended June 30 follows.

Second Quarter

Revenues Earnings (losses) before income taxes

6 unchanged sentences

$ 100,619 $ 91,141 $ 65,102 $ ( 62,915 )

Business Segment Reporting (continued)

First Six Months

Revenues Earnings (losses) before income taxes

2025 2024 2025 2024

Total operating businesses $ 195,654 $ 180,592 $ 24,220 $ 32,947

Investment partnership gains (losses) — — 8,912 ( 57,905 )

Investment gains (losses) — — 1,340 ( 1,016 )

Interest expenses not allocated to segments — — ( 1,752 ) ( 42 )

Corporate and other — — ( 8,801 ) ( 7,504 )

$ 195,654 $ 180,592 $ 23,919 $ ( 33,520 )

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(dollars in thousands except per share data)

Biglari Holdings Inc.

is a holding company owning subsidiaries engaged in a number of diverse business activities, including property and casualty insurance and reinsurance, licensing and media, restaurants, and oil and gas.

Biglari Holdings is founded and led by Sardar Biglari, Chairman and Chief Executive Officer of the Company.

Biglari Holdings’ management system combines decentralized operations with centralized financial decision-making.

Operating decisions for the various business units are made by their respective managers.

All major investment and capital allocation decisions are made for the Company and its subsidiaries by Mr.

As of June 30, 2025, Mr.

Biglari beneficially owns shares of the Company that represent approximately 74.3% of the voting interest.

Net earnings (loss) are disaggregated in the table that follows.

Amounts are recorded after deducting income taxes.

Second Quarter First Six Months

2025 2024 2025 2024

Operating businesses:

Restaurant $ 4,555 $ 4,244 $ 6,744 $ 7,717

Insurance 1,399 1,454 2,600 3,192

Oil and gas 849 13,369 9,147 14,518

Brand licensing (198) (193) (465) (458)

Interest expense (656) (32) (1,349) (32)

Total operating businesses 5,949 18,842 16,677 24,937

Goodwill impairment — (1,000) — (1,000)

Corporate and other (3,530) (3,125) (6,819) (5,121)

Investment partnership gains (losses) 46,194 (60,748) 6,768 (43,600)

Investment gains (losses) 2,318 (2,159) 1,030 (827)

Net earnings (loss) $ 50,931 $ (48,190) $ 17,656 $ (25,611)

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Our restaurant businesses, which include Steak n Shake and Western Sizzlin, comprise 449 company-operated and franchise restaurants as of June 30, 2025.

Steak n Shake Western Sizzlin

operated Franchise

Partner Traditional

Franchise Company-

operated Franchise Total

Total stores as of December 31, 2024

146 173 107 3 29 458

Corporate stores transitioned (2) 2 — — — —

Net restaurants opened (closed) (1) (1) (7) — — (9)

Total stores as of June 30, 2025

143 174 100 3 29 449

Total stores as of December 31, 2023

148 181 128 3 32 492

Corporate stores transitioned (1) 1 — — — —

Net restaurants opened (closed) (5) — (8) — (2) (15)

Total stores as of June 30, 2024

142 182 120 3 30 477

As of June 30, 2025, ten of the 143 company-operated Steak n Shake stores were closed.

Steak n Shake plans to sell or lease eight of the ten locations and refranchise the balance.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Restaurant operations are summarized below.

Second Quarter First Six Months

2025 2024 2025 2024

Net sales $ 46,858 $ 40,815 $ 88,473 $ 79,550

Franchise partner fees 20,150 18,149 37,289 35,907

Franchise royalties and fees 3,128 3,615 6,617 7,092

Other revenue 1,875 1,896 3,981 3,922

Total revenue 72,011 64,475 136,360 126,471

Restaurant cost of sales

Cost of food 14,167 30.2 % 12,357 30.3 % 26,631 30.1 % 23,331 29.3 %

Labor costs 14,020 29.9 % 12,992 31.8 % 27,460 31.0 % 25,536 32.1 %

Occupancy and other 11,852 25.3 % 11,537 28.3 % 23,706 26.8 % 22,440 28.2 %

Total cost of sales 40,039 36,886 77,797 71,307

Selling, general and administrative

General and administrative 12,776 17.7 % 13,016 20.2 % 24,704 18.1 % 24,746 19.6 %

Marketing 4,865 6.8 % 2,857 4.4 % 8,097 5.9 % 5,802 4.6 %

Other expenses (income) (1,207) (1.7) % (2,208) (3.4) % (913) (0.7) % (2,442) (1.9) %

Total selling, general and administrative 16,434 22.8 % 13,665 21.2 % 31,888 23.4 % 28,106 22.2 %

Impairments 1,251 1.7 % — — % 1,251 0.9 % 107 0.1 %

Depreciation and amortization 6,612 9.2 % 6,810 10.6 % 13,102 9.6 % 13,645 10.8 %

Interest on finance leases and obligations 1,240 1,349 2,573 2,663

Earnings before income taxes 6,435 5,765 9,749 10,643

Income tax expense 1,880 1,521 3,005 2,926

Contribution to net earnings $ 4,555 $ 4,244 $ 6,744 $ 7,717

Cost of food, labor costs, and occupancy and other costs are expressed as a percentage of net sales.

General and administrative, marketing, other expenses, impairments, and depreciation are expressed as a percentage of total revenue.

Net sales for the second quarter and first six months of 2025 were $46,858 and $88,473, respectively, representing an increase of $6,043 or 14.8% and $8,923 or 11.2%, compared to the second quarter and first six months of 2024, respectively.

The increase in net sales was primarily due to an increase in Steak n Shake’s same-store sales of 10.7% during the second quarter of 2025.

For company-operated units, sales to the end customer are recorded as revenue generated by the Company, but for franchise partner units, only our share of the restaurant’s profits, along with certain fees, are recorded as revenue.

Because we derive most of our revenue from our share of the profits, revenue will decline as we transition from company-operated units to franchise partner units.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Fees generated by our franchise partners were $20,150 during the second quarter of 2025, as compared to $18,149 during the second quarter of 2024.

Franchise partner fees were $37,289 and $35,907 during the first six months of 2025 and 2024, respectively.

Our share of franchise partner fees were higher despite fewer open units in 2025 compared to 2024.

As of June 30, 2025 and June 30, 2024, there were 174 and 182 franchise partner units, respectively.

Similar to company-operated units, the increase in franchise partner revenue is primarily due to an increase in revenue at the franchise partner units.

Included in franchise partner fees were $5,887 and $5,780 of rental income during the second quarter of 2025 and 2024, respectively, and $11,440 and $11,485 during the first six months of 2025 and 2024, respectively.

Franchise partners rent buildings and equipment from Steak n Shake.

The franchise royalties and fees generated by the traditional franchising business were $3,128 during the second quarter of 2025, as compared to $3,615 during the second quarter of 2024.

Franchise royalties and fees during the first six months of 2025 were $6,617 as compared to $7,092 during the first six months of 2024.

There were 100 Steak n Shake traditional units open on June 30, 2025, as compared to 120 units open on June 30, 2024.

The lower unit count was the primary reason for the decrease in franchise royalties and fees during 2025 compared to 2024.

The cost of food at company-operated units during the second quarter of 2025 was $14,167 or 30.2% of net sales, as compared to $12,357 or 30.3% of net sales during the second quarter of 2024.

The cost of food at company-operated units during the first six months of 2025 was $26,631 or 30.1% of net sales, as compared to $23,331 or 29.3% of net sales during the first six months of 2024.

The cost of food as a percentage of net sales was relatively flat during the second quarter of 2025 compared to 2024.

The increase during the first six months of 2025 compared to 2024 was primarily due to improvements in the quality of various products.

The labor costs at company-operated restaurants during the second quarter of 2025 were $14,020 or 29.9% of net sales, as compared to $12,992 or 31.8% of net sales in the second quarter of 2024.

Labor costs at company-operated restaurants during the first six months of 2025 were $27,460 or 31.0% of net sales, as compared to $25,536 or 32.1% of net sales in 2024.

Labor costs expressed as a percentage of net sales decreased during 2025 compared to 2024 primarily due to a decrease in management labor.

General and administrative expenses during the second quarter of 2025 were $12,776 or 17.7% of total revenue, as compared to $13,016 or 20.2% of total revenue in the second quarter of 2024.

General and administrative expenses during the first six months of 2025 were $24,704 or 18.1% of total revenue, as compared to $24,746 or 19.6% of total revenue in the first six months of 2024.

General and administrative expenses decreased during 2025 compared to 2024 primarily due to a decrease in legal and professional fees.

Marketing expenses during the second quarter of 2025 were $4,865 or 6.8% of total revenue, as compared to $2,857 or 4.4% of total revenue in the second quarter of 2024.

Marketing expenses during the first six months of 2025 were $8,097 or 5.9% of total revenue, as compared to $5,802 or 4.6% of total revenue in the first six months of 2024.

Marketing expenses increased during 2025 compared to 2024 primarily due to promotions of new products and new methods of payments.

The Company recorded $1,251 of impairment charges in the second quarter of 2025 and $1,251 and $107 in the first six months of 2025 and 2024, respectively, related to underperforming stores.

Interest on obligations under leases was $2,573 during 2025 versus $2,663 during 2024.

Other income was $913 during 2025 versus $2,442 during 2024.

During 2025, Steak n Shake sold one property for a gain of $1,100.

During 2024, Western Sizzlin received a settlement of $450 and Steak n Shake sold three properties for a gain of $1,957.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

To better convey the performance of the franchise partnership model, the table below shows the underlying sales, cost of food, labor costs, and other restaurant costs of the franchise partners.

We believe the franchise partner information is useful to readers, as they have a direct effect on Steak n Shake’s profitability.

Second Quarter First Six Months

2025 2024 2025 2024

Net sales and other $ 89,856 $ 83,470 $ 170,173 $ 164,258

Restaurant cost of sales

Cost of food $ 26,719 29.7 % $ 24,840 29.8 % $ 50,138 29.5 % $ 48,010 29.2 %

Labor costs 23,256 25.9 % 22,305 26.7 % 44,746 26.3 % 44,070 26.8 %

Occupancy and other 17,937 20.0 % 17,163 20.6 % 34,602 20.3 % 33,941 20.7 %

Total cost of sales $ 67,912 $ 64,308 $ 129,486 $ 126,021

The Company’s consolidated financial statements do not include data in the table above.

Figures are shown for information purposes only.

We view our insurance businesses as possessing two activities:

underwriting and investing.

Underwriting decisions are the responsibility of the unit managers, whereas investing decisions are the responsibility of our Chairman and CEO, Sardar Biglari.

Our business units are operated under separate local management.

Biglari Holdings’ insurance operations consist of First Guard, Southern Pioneer, and Biglari Reinsurance.

Underwriting results of our insurance operations are summarized below.

Second Quarter First Six Months

2025 2024 2025 2024

Underwriting gain attributable to:

First Guard $ 2,091 $ 1,331 $ 3,306 $ 2,131

Southern Pioneer (857) (785) (1,359) (726)

Pre-tax underwriting gain 1,234 546 1,947 1,405

Income tax expense 259 115 409 295

Net underwriting gain $ 975 $ 431 $ 1,538 $ 1,110

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Earnings of our insurance operations are summarized below.

Second Quarter First Six Months

2025 2024 2025 2024

Premiums written $ 17,403 $ 16,848 $ 36,425 $ 33,375

Premiums earned $ 17,166 $ 16,291 $ 34,931 $ 32,213

Insurance losses 11,672 10,962 23,677 21,840

Underwriting expenses 4,260 4,783 9,307 8,968

Pre-tax underwriting gain 1,234 546 1,947 1,405

Other income and expenses

Investment income 839 955 1,676 1,870

Other income (expenses) (280) 349 (293) 821

Total other income 559 1,304 1,383 2,691

Earnings before income taxes 1,793 1,850 3,330 4,096

Income tax expense 394 396 730 904

Contribution to net earnings $ 1,399 $ 1,454 $ 2,600 $ 3,192

Insurance premiums and other on the consolidated statement of earnings includes premiums earned, investment income, other income, and commissions.

First Guard is a direct underwriter of commercial truck insurance, primarily selling physical damage and nontrucking liability insurance to truckers.

First Guard’s insurance products are marketed primarily through direct response methods via the Internet or by telephone.

First Guard’s cost-efficient direct response marketing methods enable it to be a low-cost insurer.

A summary of First Guard’s underwriting results follows.

Second Quarter First Six Months

2025 2024 2025 2024

Amount % Amount % Amount % Amount %

Premiums written $ 9,098 $ 9,494 $ 18,307 $ 18,804

Premiums earned $ 9,098 100.0 % $ 9,494 100.0 % $ 18,307 100.0 % $ 18,804 100.0 %

Insurance losses 4,624 50.8 % 6,161 64.9 % 10,906 59.6 % 12,936 68.8 %

Underwriting expenses 2,383 26.2 % 2,002 21.1 % 4,095 22.4 % 3,737 19.9 %

Total losses and expenses 7,007 77.0 % 8,163 86.0 % 15,001 82.0 % 16,673 88.7 %

Pre-tax underwriting gain $ 2,091 $ 1,331 $ 3,306 $ 2,131

First Guard produced an underwriting gain in the second quarter and first six months of 2025.

Its underwriting gain increased $1,175 in the first six months of 2025 compared to 2024.

It is the nature of the insurance industry to experience volatility in underwriting performance.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Southern Pioneer

Southern Pioneer underwrites garage liability and commercial property insurance, as well as homeowners and dwelling fire insurance.

A summary of Southern Pioneer’s underwriting results follows.

Second Quarter First Six Months

2025 2024 2025 2024

Amount % Amount % Amount % Amount %

Premiums written $ 8,305 $ 7,354 $ 18,118 $ 14,571

Premiums earned $ 8,068 100.0 % $ 6,797 100.0 % $ 16,624 100.0 % $ 13,409 100.0 %

Insurance losses 7,048 87.4 % 4,801 70.6 % 12,771 76.8 % 8,904 66.4 %

Underwriting expenses 1,877 23.3 % 2,781 40.9 % 5,212 31.4 % 5,231 39.0 %

Total losses and expenses 8,925 110.7 % 7,582 111.5 % 17,983 108.2 % 14,135 105.4 %

Pre-tax underwriting gain (loss) $ (857) $ (785) $ (1,359) $ (726)

Premiums earned increased $3,215 or 24.0% in the first six months of 2025 compared to 2024, primarily because of rate increases in its personal lines, e.g.

homeowners insurance.

A summary of net investment income attributable to our insurance operations follows.

Second Quarter First Six Months

2025 2024 2025 2024

Interest, dividends and other investment income:

First Guard $ 424 $ 533 $ 850 $ 1,103

Southern Pioneer 402 422 791 767

Biglari Reinsurance 13 — 35 —

Pre-tax investment income 839 955 1,676 1,870

Income tax expense 176 201 352 393

Net investment income $ 663 $ 754 $ 1,324 $ 1,477

We consider investment income as a component of our aggregate insurance operating results.

However, we consider investment gains and losses, whether realized or unrealized, as non-operating.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

A summary of revenues and earnings of our oil and gas operations follows.

Second Quarter First Six Months

2025 2024 2025 2024

Oil and gas revenues $ 7,498 $ 8,671 $ 17,428 $ 18,181

Oil and gas production costs 2,880 4,282 6,926 8,781

Depreciation, depletion and accretion 3,111 1,878 6,367 4,670

General and administrative expenses 1,184 1,325 2,487 2,559

Total cost and expenses 7,175 7,485 15,780 16,010

Gain on sale of properties 794 16,165 10,117 16,646

Earnings before income taxes 1,117 17,351 11,765 18,817

Income tax expense 268 3,982 2,618 4,299

Contribution to net earnings $ 849 $ 13,369 $ 9,147 $ 14,518

Our oil and gas business is highly dependent on oil and natural gas prices.

We did not record any impairments to our oil and gas assets during 2025.

However, we may be required to record impairments of our oil and gas properties resulting from prolonged declines in oil and gas prices.

It is expected that the prices of oil and gas commodities will remain volatile, which will be reflected in our financial results.

Abraxas Petroleum

Abraxas Petroleum operates oil and gas properties in the Permian Basin.

Earnings for Abraxas Petroleum are summarized below.

Second Quarter First Six Months

2025 2024 2025 2024

Oil and gas revenues $ 4,161 $ 4,992 $ 10,051 $ 10,860

Oil and gas production costs 2,095 2,266 4,541 5,085

Depreciation, depletion and accretion 1,777 781 3,710 2,328

General and administrative expenses 716 696 1,365 1,292

Total cost and expenses 4,588 3,743 9,616 8,705

Gain on sale of properties 794 16,165 10,117 16,646

Earnings before income taxes 367 17,414 10,552 18,801

Income tax expense 88 4,013 2,468 4,332

Contribution to net earnings $ 279 $ 13,401 $ 8,084 $ 14,469

Abraxas Petroleum’s revenue remained consistent during the first six months of 2025 compared to 2024.

Depletion increased in the first six months of 2025 compared to 2024 due to an increase in the depletion rate.

During the first six months of 2025, Abraxas Petroleum recorded a gain of $10,117 from selling undeveloped reserves to an unaffiliated party to conduct development activities;

however, Abraxas Petroleum will not be required to fund any exploration expenditures on the undeveloped properties.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Southern Oil primarily operates oil and natural gas properties offshore in Louisiana state waters.

Earnings for Southern Oil are summarized below.

Second Quarter First Six Months

2025 2024 2025 2024

Oil and gas revenues $ 3,337 $ 3,679 $ 7,377 $ 7,321

Oil and gas production costs 785 2,016 2,385 3,696

Depreciation, depletion and accretion 1,334 1,097 2,657 2,342

General and administrative expenses 468 629 1,122 1,267

Total cost and expenses 2,587 3,742 6,164 7,305

Earnings (loss) before income taxes 750 (63) 1,213 16

Income tax expense (benefit) 180 (31) 150 (33)

Contribution to net earnings $ 570 $ (32) $ 1,063 $ 49

Southern Oil’s revenue remained consistent during the first six months of 2025 compared to 2024.

Southern Oil repaired several nonperforming wells throughout 2024 which has increased production during 2025.

However, the sales prices of crude oil were lower during 2025 compared to the same period of 2024 which offset any increase in revenue from Southern Oil’s production increases.

Brand Licensing

Maxim’s business lies principally in licensing and media.

Earnings of operations are summarized below.

Second Quarter First Six Months

2025 2024 2025 2024

Licensing and media revenue $ 2,287 $ 301 $ 3,694 $ 513

Licensing and media costs 2,421 523 4,072 1,026

Depreciation and amortization 100 — 170 —

General and administrative expenses 33 33 76 96

Earnings (loss) before income taxes (267) (255) (624) (609)

Income tax expense (benefit) (69) (62) (159) (151)

Contribution to net earnings (loss) $ (198) $ (193) $ (465) $ (458)

Maxim’s revenue increased during the first half of 2025 as compared to the same period in 2024 due to the launch of various new digital contests.

Investment Gains and Investment Partnership Gains

Investment gains net of tax for the second quarter of 2025 were $2,318 as compared to investment losses net of tax for the second quarter of 2024 of $2,159.

Investment gains net of tax for the first six months of 2025 were $1,030 as compared to investment losses net of tax for the first six months of 2024 of $827.

Dividends earned on investments are reported as investment income by our insurance companies.

We consider investment income as a component of our aggregate insurance operating results.

However, we consider investment gains and losses, whether realized or unrealized, as non-operating.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Earnings (loss) from our investments in partnerships are summarized below.

Second Quarter First Six Months

2025 2024 2025 2024

Investment partnership gains (losses) $ 58,504 $ (79,890) $ 8,912 $ (57,905)

Tax expense (benefit) 12,310 (19,142) 2,144 (14,305)

Contribution to net earnings $ 46,194 $ (60,748) $ 6,768 $ (43,600)

Investment partnership gains include gains/losses from changes in market values of underlying investments and dividends earned by the partnerships.

Dividend income has a lower effective tax rate than income from capital gains.

These gains and losses have caused and will continue to cause significant volatility in our periodic earnings.

The investment partnerships hold the Company’s common stock as investments.

The Company’s pro-rata share of its common stock held by the investment partnerships is recorded as treasury stock even though these shares are legally outstanding.

Gains and losses on Company common stock included in the earnings of the partnerships are eliminated in the Company’s consolidated financial results.

Investment gains and losses in 2025 and 2024 were mainly derived from our investments in equity securities and included unrealized gains and losses from market price changes during the period.

We believe that investment and derivative gains/losses are generally meaningless for analytical purposes in understanding our quarterly and annual results.

Interest Expense

The Company’s interest expense is summarized below.

Second Quarter First Six Months

2025 2024 2025 2024

Interest expense on notes payable $ 852 $ 42 $ 1,752 $ 42

Tax benefit 196 10 403 10

Interest expense net of tax $ 656 $ 32 $ 1,349 $ 32

Corporate and Other

Corporate expenses exclude the activities of the restaurant, insurance, brand licensing, and oil and gas businesses.

Corporate and other net losses during the second quarter and first six months of 2025 were $3,530 and $6,819, respectively, compared to $3,125 and $5,121 in the second quarter and first six months of 2024, respectively.

Income tax expense for the second quarter of 2025 was $14,171 compared to income tax benefit of $14,725 for the second quarter of 2024.

Income tax expense for the first six months of 2025 was $6,263 compared to income tax benefit of $7,909 for the first six months of 2024.

The variance in income taxes between 2025 and 2024 is attributable to taxes on income generated by the investment partnerships.

Investment partnership pre-tax gains were $58,504 during the second quarter of 2025 compared to pre-tax losses of $79,890 during the second quarter of 2024.

Investment partnership pre-tax gains were $8,912 during the first six months of 2025 compared to pre-tax losses of $57,905 during the first six months of 2024.

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