Biglari Holdings Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS BIGLARI HOLDINGS INC. CONSOLIDATED BALANCE SHEETS (dollars in thousands) June 30, 2025 December 31, 2024 (Unaudited) Assets Current assets: Cash and cash equivalents $ 32,766 $ 30,709 Investments 104,541 102,975 Receivables 21,082 25,184 Inventories 4,371 4,031 Other current assets 11,521 7,716 Total current assets 174,281 170,615 Property and equipment 365,262 376,155 Operating lease assets 35,506 34,011 Goodwill and other intangible assets 76,244 75,316 Investment partnerships 202,893 201,727 Other assets 9,393 8,309 Total assets $ 863,579 $ 866,133 Liabilities and shareholders’ equity Liabilities Current liabilities: Accounts payable and accrued expenses $ 56,418 $ 63,381 Losses and loss adjustment expenses 17,203 17,250 Unearned premiums 18,412 17,236 Current portion of lease obligations 15,054 14,449 Line of credit 19,000 35,000 Total current liabilities 126,087 147,316 Lease obligations 91,384 90,739 Deferred taxes 40,768 29,393 Line of credit — 10,000 Asset retirement obligations 15,549 15,218 Other liabilities 505 506 Total liabilities 274,293 293,172 Shareholders’ equity Common stock 1,138 1,138 Additional paid-in capital 385,594 385,594 Retained earnings 645,355 627,699 Accumulated other comprehensive loss ( 1,392 ) ( 2,872 ) Treasury stock, at cost ( 441,409 ) ( 438,598 ) Biglari Holdings Inc. shareholders’ equity 589,286 572,961 Total liabilities and shareholders’ equity $ 863,579 $ 866,133 See accompanying Notes to Consolidated Financial Statements. 1 Table of Contents BIGLARI HOLDINGS INC. CONSOLIDATED STATEMENTS OF EARNINGS (dollars in thousands except per share amounts) Second Quarter First Six Months 2025 2024 2025 2024 (Unaudited) (Unaudited) Revenues Restaurant operations $ 72,011 $ 64,475 $ 136,360 $ 126,471 Insurance premiums and other 18,823 17,694 38,172 35,427 Oil and gas 7,498 8,671 17,428 18,181 Licensing and media 2,287 301 3,694 513 Total revenues 100,619 91,141 195,654 180,592 Costs and expenses Restaurant cost of sales 40,039 36,886 77,797 71,307 Insurance losses and underwriting expenses 15,932 15,745 32,984 30,808 Oil and gas production costs 2,880 4,282 6,926 8,781 Licensing and media costs 2,421 523 4,072 1,026 Selling, general and administrative 22,853 18,653 44,220 36,928 Gain on sale of oil and gas properties ( 794 ) ( 16,165 ) ( 10,117 ) ( 16,646 ) Impairments 1,251 1,000 1,251 1,107 Depreciation, depletion, and amortization 10,272 9,122 20,529 19,175 Interest expense on leases 1,240 1,349 2,573 2,663 Interest expense on borrowings 852 42 1,752 42 Total costs and expenses 96,946 71,437 181,987 155,191 Other income Investment gains (losses) 2,925 ( 2,729 ) 1,340 ( 1,016 ) Investment partnership gains (losses) 58,504 ( 79,890 ) 8,912 ( 57,905 ) 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 ) Income tax expense (benefit) 14,171 ( 14,725 ) 6,263 ( 7,909 ) Net earnings (loss) $ 50,931 $ ( 48,190 ) $ 17,656 $ ( 25,611 ) 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 $ 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 Table of Contents BIGLARI HOLDINGS INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (dollars in thousands) 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 ) Comprehensive income (loss) $ 51,941 $ ( 48,308 ) $ 19,136 $ ( 25,760 ) See accompanying Notes to Consolidated Financial Statements. 3 Table of Contents BIGLARI HOLDINGS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands) First Six Months 2025 2024 (Unaudited) Operating activities Net earnings (loss) $ 17,656 $ ( 25,611 ) Adjustments to reconcile net earnings (loss) to operating cash flows: Depreciation, depletion, and amortization 20,529 19,175 Provision for deferred income taxes 11,254 ( 11,656 ) Asset impairments 1,251 1,107 Gains on sale of assets ( 11,032 ) ( 19,618 ) Investment and investment partnership gains and losses ( 10,252 ) 58,921 Distributions from investment partnerships 35,000 1,000 Changes in receivables, inventories and other assets 559 1,234 Changes in accounts payable and accrued expenses ( 7,023 ) ( 3,642 ) Net cash provided by operating activities 57,942 20,910 Investing activities Capital expenditures ( 10,004 ) ( 16,429 ) Proceeds from property and equipment disposals 12,477 21,820 Purchases of interests in limited partnerships ( 30,065 ) ( 22,924 ) Purchases of investments ( 31,479 ) ( 43,152 ) Sales of investments and redemptions of fixed maturity securities 31,910 41,099 Net cash used in investing activities ( 27,161 ) ( 19,586 ) Financing activities 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 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 second quarter $ 33,477 $ 28,280 June 30, 2025 2024 (Unaudited) 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 second quarter $ 33,477 $ 28,280 See accompanying Notes to Consolidated Financial Statements. 4 Table of Contents BIGLARI HOLDINGS INC. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited) (dollars in thousands) Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total 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. 5 Table of Contents BIGLARI HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2025 (dollars in thousands, except share and per share data) Note 1. Summary of Significant Accounting Policies Description of Business The accompanying unaudited consolidated financial statements of Biglari Holdings Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) applicable to interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In our opinion, all adjustments considered necessary to present fairly the results of the interim periods have been included and consist only of normal recurring adjustments. The results for the interim periods shown are not necessarily indicative of results for the year. The financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2024. 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. The Company’s largest operating subsidiaries are involved in the franchising and operating of restaurants. 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. Biglari. As of June 30, 2025, Mr. Biglari beneficially owns shares of the Company that represent approximately 74.3 % of the voting interest. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, including Steak n Shake Inc., Western Sizzlin Corporation, First Guard Insurance Company, Maxim Inc., Southern Pioneer Property & Casualty Insurance Company, Biglari Reinsurance Ltd., Southern Oil Company and Abraxas Petroleum Corporation. Intercompany accounts and transactions have been eliminated in consolidation. Note 2. Earnings Per Share 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. However, these shares are legally outstanding. 6 Table of Contents Note 2. 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 Common stock authorized 500,000 10,000,000 500,000 10,000,000 Common stock issued and outstanding 206,864 2,068,640 206,864 2,068,640 The Company has applied the “two-class method” of computing earnings per share as prescribed in Accounting Standards Codification (“ASC”) 260, “ Earnings Per Share ”. (Class B shares are economically equivalent to one-fifth of a Class A share.) The equivalent Class A common stock applied for computing earnings per share excludes the proportional shares of Biglari Holdings’ stock held by the investment partnerships. In the tabulation below is the weighted average equivalent Class A common stock for earnings per share. Second Quarter First Six Months 2025 2024 2025 2024 Equivalent Class A common stock outstanding 620,592 620,592 620,592 620,592 Proportional ownership of Company stock held by investment partnerships 358,832 340,232 358,088 338,518 Equivalent Class A common stock for earnings per share 261,760 280,360 262,504 282,074 Note 3. Investments We classify investments in fixed maturity securities at the acquisition date as available-for-sale. Realized gains and losses on disposals of investments are determined on a specific identification basis. Dividends and interest 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. 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. Note 4. Investment Partnerships The Company reports on the limited partnership interests in investment partnerships under the equity method of accounting. We record our proportional share of equity in the investment partnerships but exclude Company common stock held by said partnerships. 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. The Company records gains/losses from investment partnerships (inclusive of the investment partnerships’ unrealized gains and losses on their securities) in the consolidated statements of earnings based on our carrying value of these partnerships. The fair value is calculated net of the general partner’s accrued incentive fees. Gains and losses on Company common stock included in the earnings of these partnerships are eliminated because they are recorded as treasury stock. Biglari Capital Corp. is the general partner of the investment partnerships. Biglari Capital Corp. is solely owned by Mr. Biglari. Under the terms of their partnership agreements, each contribution made by the Company to the investment partnerships is subject to a rolling five year lock-up period. The lock-up period can be waived by the general partner in its sole discretion. 7 Table of Contents Note 4. 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. Fair Value Company Common Stock Carrying Value Partnership interest at December 31, 2024 $ 656,266 $ 454,539 $ 201,727 Investment partnership gains (losses) 68,515 59,603 8,912 Distributions (net of contributions) ( 4,935 ) ( 4,935 ) Changes in proportionate share of Company stock held 2,811 ( 2,811 ) Partnership interest at June 30, 2025 $ 719,846 $ 516,953 $ 202,893 Fair Value Company Common Stock Carrying Value Partnership interest at December 31, 2023 $ 472,772 $ 273,669 $ 199,103 Investment partnership gains (losses) ( 12,645 ) 45,260 ( 57,905 ) Contributions (net of distributions) 21,924 21,924 Changes in proportionate share of Company stock held 4,391 ( 4,391 ) 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. June 30, 2025 December 31, 2024 Carrying value of investment partnerships $ 202,893 $ 201,727 Deferred tax liability related to investment partnerships ( 30,030 ) ( 17,255 ) Carrying value of investment partnerships net of deferred taxes $ 172,863 $ 184,472 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. Fair value of our partnership interest is assessed according to our proportional ownership interest of the fair value of investments held by the investment partnerships. Unrealized gains and losses on marketable securities held by the investment partnerships affect our net earnings. Gains/losses from investment partnerships recorded in the Company’s consolidated statements of earnings are presented below. 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 (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. Our policy is to accrue an estimated incentive fee throughout the year. The total incentive reallocation from Biglari Holdings to Biglari Capital Corp. includes gains on the Company’s common stock. 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 six months of 2025 and 2024. 8 Table of Contents Note 4. Investment Partnerships (continued) 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 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 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. Note 5. Property and Equipment Property and equipment is composed of the following. June 30, 2025 December 31, 2024 Land $ 131,142 $ 134,738 Buildings 161,857 160,282 Land and leasehold improvements 153,272 152,091 Equipment 211,518 213,800 Oil and gas properties 157,661 156,849 Construction in progress 1,251 672 816,701 818,432 Less accumulated depreciation, depletion, and amortization ( 451,439 ) ( 442,277 ) Property and equipment, net $ 365,262 $ 376,155 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 $ 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. 9 Table of Contents Note 5. Property and Equipment (continued) 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 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. Note 6. Goodwill and Other Intangible Assets Goodwill Goodwill consists of the excess of the purchase price over the fair value of the net assets acquired in connection with business acquisitions. A reconciliation of the change in the carrying value of goodwill is as follows. Goodwill Goodwill at December 31, 2024 Goodwill $ 53,796 Impairments prior to 2025 ( 1,300 ) 52,496 Change in foreign exchange rates during the first six months of 2025 72 Goodwill at June 30, 2025 $ 52,568 Goodwill and indefinite-lived intangible asset impairment reviews include determining the estimated fair values of our reporting units and indefinite-lived intangible assets. The key assumptions and inputs used in such determinations may include forecasting revenues and expenses, cash flows and capital expenditures, as well as an appropriate discount rate and other inputs. Significant judgment by management is required in estimating the fair value of a reporting unit and in performing impairment reviews. Due to the inherent subjectivity and uncertainty in forecasting future cash flows and earnings over long periods of time, actual results may differ materially from the forecasts. If the carrying value of the indefinite-lived intangible asset exceeds fair value, the excess is charged to earnings as an impairment loss. 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 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 Intangible assets with indefinite lives are composed of the following. Trade Names Lease Rights Total Balance at December 31, 2024 Intangibles $ 15,876 $ 10,692 $ 26,568 Impairments prior to 2025 — ( 3,748 ) ( 3,748 ) 15,876 6,944 22,820 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 10 Table of Contents Note 7. Restaurant Operations Revenues Restaurant operations revenues were as follows. 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 1,875 1,896 3,981 3,922 $ 72,011 $ 64,475 $ 136,360 $ 126,471 Net Sales Net sales are composed of retail sales of food through company-operated stores. Company-operated store revenues are recognized, net of discounts and sales taxes, when our obligation to perform is satisfied at the point of sale. Sales taxes related to these sales are collected from customers and remitted to the appropriate taxing authority and are not reflected in the Company’s consolidated statements of earnings as revenue. Franchise Partner Fees Franchise partner fees are composed of up to 15 % of sales as well as 50 % of profits. We are therefore fully affected by the operating results of the business, unlike in a traditional franchising arrangement, where the franchisor obtains a royalty fee based on sales only. We generate most of our revenue from our share of the franchise partners’ profits. An initial franchise fee of ten thousand dollars is recognized when the operator becomes a franchise partner. The Company recognizes franchise partner fees monthly as underlying restaurant sales occur. The Company leases or subleases property and equipment to franchise partners under lease arrangements. Both real estate and equipment rental payments are charged to franchise partners and are recognized in accordance with ASC 842, “ Leases ”. 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 Franchise royalties and fees from Steak n Shake and Western Sizzlin franchisees are based upon a percentage of sales of the franchise restaurant and are recognized as earned. Franchise royalties are billed on a monthly basis. Initial franchise fees when a new restaurant opens or at the start of a new franchise term are recorded as deferred revenue when received and recognized as revenue over the term of the franchise agreement. Other Revenue Restaurant operations sell gift cards to customers which can be redeemed for retail food sales within our stores. Gift cards are recorded as deferred revenue when issued and are subsequently recorded as net sales upon redemption. Restaurant operations estimate breakage related to gift cards when the likelihood of redemption is remote. This estimate utilizes historical trends based on the vintage of the gift card. Breakage on gift cards is recorded as other revenue in proportion to the rate of gift card redemptions by vintage. 11 Table of Contents Note 8. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses include the following. June 30, 2025 December 31, 2024 Accounts payable $ 25,538 $ 28,542 Gift cards and other marketing 4,593 6,655 Insurance accruals 1,074 1,746 Compensation 5,198 4,911 Deferred revenue 5,167 3,723 Taxes payable 4,191 8,134 Oil and gas payable 2,042 1,912 Professional fees 3,588 3,052 Due to broker 4,276 3,517 Other 751 1,189 Accounts payable and accrued expenses $ 56,418 $ 63,381 Note 9. Lines of Credit Biglari Holdings Lines of Credit Biglari Holdings’ line of credit dated September 13, 2022 was amended on September 13, 2024 and the available line of credit is $ 35,000 . The line of credit matures on September 13, 2026. The line of credit includes customary covenants, as well as financial maintenance covenants. 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 . The line of credit will be available on a revolving basis until November 7, 2027. The line of credit includes customary covenants as well as financial maintenance covenants. 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 June 30, 2025 and December 31, 2024, there was no debt outstanding under its revolver. 12 Table of Contents Note 10. 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 six-month periods ended June 30, 2025 and 2024 follows. June 30, 2025 June 30, 2024 Balances at beginning of year: Gross liabilities $ 18,028 $ 16,105 Reinsurance recoverable on unpaid losses ( 778 ) ( 937 ) Net liabilities 17,250 15,168 Incurred losses and loss adjustment expenses: Current accident year 23,594 23,539 Prior accident years 872 ( 1,330 ) Total 24,466 22,209 Paid losses and loss adjustment expenses: Current accident year 18,663 16,653 Prior accident years 5,850 5,029 Total 24,513 21,682 Balances at June 30: Net liabilities 17,203 15,695 Reinsurance recoverable on unpaid losses 612 272 Gross liabilities $ 17,815 $ 15,967 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. Note 11. Lease Assets and Obligations Lease obligations include the following. Current portion of lease obligations June 30, 2025 December 31, 2024 Finance lease liabilities $ 1,333 $ 1,250 Finance obligations 4,709 4,664 Operating lease liabilities 9,012 8,535 Total current portion of lease obligations $ 15,054 $ 14,449 Long-term lease obligations Finance lease liabilities $ 3,873 $ 2,747 Finance obligations 58,991 60,386 Operating lease liabilities 28,520 27,606 Total long-term lease obligations $ 91,384 $ 90,739 Nature of Leases Steak n Shake and Western Sizzlin operate restaurants that are located on sites owned by us or leased from third parties. In addition, they own sites and lease sites from third parties that are leased and/or subleased to franchisees. 13 Table of Contents Note 11. Lease Assets and Obligations (continued) Lease Costs A significant portion of our operating and finance lease portfolio includes restaurant locations. We recognize fixed lease expense for operating leases on a straight-line basis over the lease term. For finance leases, we recognize amortization expense on the right-of-use asset and interest expense on the lease liability over the lease term. Total lease cost consists of the following. Second Quarter First Six Months 2025 2024 2025 2024 Finance lease costs: Amortization of right-of-use assets $ 226 $ 221 $ 439 $ 447 Interest on lease liabilities 87 83 161 167 Operating and variable lease costs 2,862 2,948 5,798 5,777 Sublease income ( 2,512 ) ( 2,986 ) ( 5,120 ) ( 5,975 ) Total lease costs $ 663 $ 266 $ 1,278 $ 416 Supplemental cash flow information related to leases is as follows. First Six Months 2025 2024 Cash paid for amounts included in the measurement of lease liabilities: Financing cash flows from finance leases $ 625 $ 621 Operating cash flows from finance leases $ 161 $ 167 Operating cash flows from operating leases $ 5,410 $ 5,409 Supplemental balance sheet information related to leases is as follows. June 30, 2025 December 31, 2024 Finance leases: Property and equipment, net $ 4,334 $ 2,980 Weighted-average lease terms and discount rates are as follows. June 30, 2025 Weighted-average remaining lease terms: Finance leases 5.97 years Operating leases 6.44 years Weighted-average discount rates: Finance leases 7.0 % Operating leases 7.0 % 14 Table of Contents Note 11. Lease Assets and Obligations (continued) Maturities of lease liabilities as of June 30, 2025 are as follows. Year Operating Leases Finance Leases Remainder of 2025 $ 5,490 $ 754 2026 9,437 1,486 2027 7,079 1,152 2028 6,130 764 2029 5,061 532 After 2029 13,101 1,717 Total lease payments 46,298 6,405 Less interest 8,766 1,199 Total lease liabilities $ 37,532 $ 5,206 Lease Income 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 Variable lease income 2,288 1,824 4,188 3,623 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 June 30, 2025. Franchise partner leases and subleases are short-term leases and have been excluded from the table. Operating Leases Year Subleases Owned Properties Remainder of 2025 $ 386 $ 323 2026 528 639 2027 431 651 2028 311 662 2029 225 678 After 2029 225 3,499 Total future minimum receipts $ 2,106 $ 6,452 Note 12. Income Taxes 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 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. 15 Table of Contents Note 12. 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. Note 13. Commitments and Contingencies We are involved in various legal proceedings and have certain unresolved claims pending. We believe, based on examination of these matters and experiences to date, that the ultimate liability, if any, in excess of amounts already provided in our consolidated financial statements is not likely to have a material effect on our results of operations, financial position or cash flow. Note 14. Fair Value of Financial Assets The fair values of substantially all of our financial instruments were measured using market or income approaches. Considerable judgment may be required in interpreting market data used to develop the estimates of fair value. Accordingly, the fair values presented are not necessarily indicative of the amounts that could be realized in an actual current market exchange. The use of alternative market assumptions and/or estimation methodologies may have a material effect on the estimated fair value. The hierarchy for measuring fair value consists of Levels 1 through 3, which are described below. • Level 1 – Inputs represent unadjusted quoted prices for identical assets or liabilities exchanged in active markets. • Level 2 – Inputs include directly or indirectly observable inputs (other than Level 1 inputs) such as quoted prices for similar assets or liabilities exchanged in active or inactive markets; quoted prices for identical assets or liabilities exchanged in inactive markets; other inputs that may be considered in fair value determinations of the assets or liabilities, such as interest rates and yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Pricing evaluations generally reflect discounted expected future cash flows, which incorporate yield curves for instruments with similar characteristics, such as credit ratings, estimated durations and yields for other instruments of the issuer or entities in the same industry sector. • Level 3 – Inputs include unobservable inputs used in the measurement of assets and liabilities. Management is required to use its own assumptions regarding unobservable inputs because there is little, if any, market activity in the assets or liabilities and we may be unable to corroborate the related observable inputs. Unobservable inputs require management to make certain projections and assumptions about the information that would be used by market participants in pricing assets or liabilities. The following methods and assumptions were used to determine the fair value of each class of the following assets recorded at fair value in the consolidated balance sheets: Cash equivalents: Cash equivalents primarily consist of money market funds which are classified as Level 1 of the fair value hierarchy. Equity securities: The Company’s investments in equity securities are classified as Level 1 of the fair value hierarchy. Bonds: The Company’s investments in bonds consist of both corporate and government debt. Bonds may be classified as Level l or Level 2 of the fair value hierarchy. 16 Table of Contents Note 14. Fair Value of Financial Assets (continued) 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 Assets Cash equivalents $ 14,780 $ — $ — $ 14,780 $ 11,684 $ — $ — $ 11,684 Equity securities Consumer goods 43,823 — — 43,823 39,706 — — 39,706 Other 5,229 — — 5,229 5,569 — — 5,569 Bonds Government 52,376 3,612 — 55,988 52,328 5,245 — 57,573 Corporate — 656 — 656 — 750 — 750 Total assets at fair value $ 116,208 $ 4,268 $ — $ 120,476 $ 109,287 $ 5,995 $ — $ 115,282 There were no changes in our valuation techniques used to measure fair values on a recurring basis. Note 15. Related Party Transactions Service Agreement The Company is party to a service agreement with Biglari Enterprises LLC (“Biglari Enterprises”) under which Biglari Enterprises provides business and administrative related services to the Company. Biglari Enterprises is owned by Mr. Biglari. 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. Incentive Agreement The Incentive Agreement establishes a performance-based annual incentive payment for Mr. Biglari contingent upon the growth in adjusted equity in each year attributable to our operating businesses. In order for Mr. Biglari to receive any incentive, our operating businesses must achieve an annual increase in shareholders’ equity in excess of 6 % (the “hurdle rate”) above the previous highest level (the “high-water mark”). Mr. Biglari will receive 25 % of any incremental book value created above the high-water mark plus the hurdle rate. 17 Table of Contents Note 16. Business Segment Reporting Our reportable business segments are organized in a manner that reflects how management views those business activities. Biglari Holdings’ diverse businesses are managed on an unusually decentralized basis. Our restaurant operations include Steak n Shake and Western Sizzlin. Our insurance operations include First Guard, Southern Pioneer, and Biglari Reinsurance. Our oil and gas operations include Southern Oil and Abraxas Petroleum. The Company also reports segment information for Maxim. Other business activities not specifically identified with reportable business segments are presented under corporate and other. We report our earnings from investment partnerships separately. The Company’s chief operating decision maker is the Chief Executive Officer who is ultimately responsible for significant capital allocation decisions, evaluating operating performance and selecting the chief executive to head each of the operating segments. The cost and expense information provided is based on the information regularly provided to the chief operating decision maker. Given the varied operating segments and differences in revenue streams and cost structures, there are wide variances in the form, content, and levels of such expense information significant to the business. With respect to insurance underwriting, the chief operating decision maker considers pre-tax underwriting earnings. Typically, there are no budgeted or forecasted premiums. For most non-insurance businesses, pre-tax earnings are considered in allocating resources and capital. 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. Restaurant Second Quarter 2025 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 2024 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 18 Table of Contents Note 16. Business Segment Reporting (continued) First Six Months 2025 Steak n Shake Western Sizzlin Total Restaurants Revenue $ 131,174 $ 5,186 $ 136,360 Cost and expenses: Cost of food 24,853 1,778 26,631 Labor costs 26,215 1,245 27,460 Occupancy and other 24,466 1,813 26,279 Selling, general and administrative 31,805 83 31,888 Depreciation, amortization and impairment 14,315 38 14,353 Total costs and expenses 121,654 4,957 126,611 Earnings before income taxes $ 9,520 $ 229 $ 9,749 First Six Months 2024 Steak n Shake Western Sizzlin Total Restaurants Revenue $ 121,065 $ 5,406 $ 126,471 Cost and expenses: Cost of food 21,570 1,761 23,331 Labor costs 23,775 1,761 25,536 Occupancy and other 24,025 1,078 25,103 Selling, general and administrative 28,231 ( 125 ) 28,106 Depreciation, amortization and impairment 13,718 34 13,752 Total costs and expenses 111,319 4,509 115,828 Earnings before income taxes $ 9,746 $ 897 $ 10,643 Insurance Second Quarter 2025 First Guard Southern Pioneer Total Underwriting Investment Income Other Total Insurance Revenue $ 9,098 $ 8,068 $ 17,166 $ 839 $ 818 $ 18,823 Cost and expenses: Insurance losses 4,624 7,048 11,672 — — 11,672 Underwriting expenses 2,383 1,877 4,260 — — 4,260 Other segment items — — — — 1,098 1,098 Total costs and expenses 7,007 8,925 15,932 — 1,098 17,030 Earnings before income taxes $ 2,091 $ ( 857 ) $ 1,234 $ 839 $ ( 280 ) $ 1,793 19 Table of Contents Note 16. Business Segment Reporting (continued) Second Quarter 2024 First Guard Southern Pioneer Total Underwriting Investment Income Other Total Insurance Revenue $ 9,494 $ 6,797 $ 16,291 $ 955 $ 448 $ 17,694 Cost and expenses: Insurance losses 6,161 4,801 10,962 — — 10,962 Underwriting expenses 2,002 2,781 4,783 — — 4,783 Other segment items — — — — 99 99 Total costs and expenses 8,163 7,582 15,745 — 99 15,844 Earnings before income taxes $ 1,331 $ ( 785 ) $ 546 $ 955 $ 349 $ 1,850 First Six Months 2025 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 2024 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. 20 Table of Contents Note 16. Business Segment Reporting (continued) Oil and Gas Second Quarter 2025 Abraxas Petroleum Southern Oil Total Oil and Gas Revenue $ 4,161 $ 3,337 $ 7,498 Cost and expenses: Production costs 2,095 785 2,880 Depreciation, depletion and accretion 1,777 1,334 3,111 General and administrative 716 468 1,184 Total costs and expenses 4,588 2,587 7,175 Gains on sales of properties 794 — 794 Earnings before income taxes $ 367 $ 750 $ 1,117 Second Quarter 2024 Abraxas Petroleum Southern Oil Total Oil and Gas Revenue $ 4,992 $ 3,679 $ 8,671 Cost and expenses: Production costs 2,266 2,016 4,282 Depreciation, depletion and accretion 781 1,097 1,878 General and administrative 696 629 1,325 Total costs and expenses 3,743 3,742 7,485 Gains on sales of properties 16,165 — 16,165 Earnings before income taxes $ 17,414 $ ( 63 ) $ 17,351 First Six Months 2025 Abraxas Petroleum Southern Oil Total Oil and Gas 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 21 Table of Contents Note 16. Business Segment Reporting (continued) First Six Months 2024 Abraxas Petroleum Southern Oil Total Oil and Gas 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 General and administrative 33 33 76 96 Depreciation and amortization 100 — 170 — Total costs and expenses 2,554 556 4,318 1,122 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 and six months ended June 30 follows. Second Quarter Revenues Earnings (losses) before income taxes 2025 2024 2025 2024 Total operating businesses $ 100,619 $ 91,141 $ 9,078 $ 24,711 Investment partnership gains (losses) — — 58,504 ( 79,890 ) Investment gains (losses) — — 2,925 ( 2,729 ) Interest expenses not allocated to segments — — ( 852 ) ( 42 ) Corporate and other — — ( 4,553 ) ( 4,965 ) $ 100,619 $ 91,141 $ 65,102 $ ( 62,915 ) 22 Table of Contents Note 16. 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 ) 23 Table of Contents Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (dollars in thousands except per share data) Overview 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. Biglari. 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) 24 Table of Contents Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) Restaurants 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 Company- 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. 25 Table of Contents Item 2. 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 Revenue 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. 26 Table of Contents Item 2. 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. 27 Table of Contents Item 2. 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 Revenue 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. Insurance 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 28 Table of Contents Item 2. 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 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. 29 Table of Contents Item 2. 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. 30 Table of Contents Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) Oil and Gas 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. 31 Table of Contents Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) Southern Oil 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. 32 Table of Contents Item 2. 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 Taxes 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. 33 Table of Contents