Biglari Holdings Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS BIGLARI HOLDINGS INC. CONSOLIDATED BALANCE SHEETS (dollars in thousands) March 31, 2026 December 31, 2025 (Unaudited) Assets Current assets: Cash and cash equivalents $ 200,075 $ 268,782 Investments 114,187 69,050 Receivables 24,942 23,283 Inventories 3,520 3,769 Other current assets 13,486 13,642 Total current assets 356,210 378,526 Property and equipment 367,816 366,607 Operating lease assets 42,420 40,052 Goodwill and other intangible assets 76,080 76,242 Investment partnerships 165,493 154,275 Other assets 10,278 9,681 Total assets $ 1,018,297 $ 1,025,383 Liabilities and shareholders’ equity Liabilities Current liabilities: Accounts payable and accrued expenses $ 66,172 $ 72,946 Loss and loss adjustment expenses 18,755 18,220 Unearned premiums 18,520 17,813 Current portion of lease obligations 12,609 13,946 Current portion of note payable and lines of credit 28,262 33,070 Total current liabilities 144,318 155,995 Lease obligations 105,165 97,701 Note payable and lines of credit 211,676 213,920 Deferred taxes 21,509 18,029 Asset retirement obligations 15,700 15,542 Other liabilities 769 767 Total liabilities 499,137 501,954 Shareholders’ equity Common stock 1,147 1,138 Additional paid-in capital 400,505 385,594 Retained earnings 575,680 590,211 Accumulated other comprehensive loss ( 1,570 ) ( 1,350 ) Treasury stock, at cost ( 456,602 ) ( 452,164 ) Biglari Holdings Inc. shareholders’ equity 519,160 523,429 Total liabilities and shareholders’ equity $ 1,018,297 $ 1,025,383 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) First Quarter 2026 2025 (Unaudited) Revenues Restaurant operations $ 66,146 $ 64,349 Insurance premiums and other 18,938 19,349 Oil and gas 9,136 9,930 Licensing and media 3,261 1,407 Total revenues 97,481 95,035 Costs and expenses Restaurant cost of sales 37,465 37,758 Insurance losses and underwriting expenses 14,822 17,052 Oil and gas production costs 3,924 4,046 Licensing and media costs 2,874 1,651 Selling, general and administrative 24,872 21,367 Gain on sale of oil and gas properties — ( 9,323 ) Depreciation, depletion, and amortization 10,657 10,257 Interest expense on leases 1,357 1,333 Interest expense on debt 5,651 900 Total costs and expenses 101,622 85,041 Other income Investment gains (losses) ( 1,287 ) ( 1,585 ) Investment partnership gains (losses) ( 13,454 ) ( 49,592 ) Total other income (expense) ( 14,741 ) ( 51,177 ) Earnings (loss) before income taxes ( 18,882 ) ( 41,183 ) Income tax expense (benefit) ( 4,351 ) ( 7,908 ) Net earnings (loss) $ ( 14,531 ) $ ( 33,275 ) Net earnings (loss) per average equivalent Class A share* $ ( 55.81 ) $ ( 126.40 ) * Net earnings (loss) per average equivalent Class B share outstanding are one-fifth of the average equivalent Class A share or $( 11.16 ) for the first quarter of 2026 and $( 25.28 ) for the first quarter of 2025. See accompanying Notes to Consolidated Financial Statements. 2 Table of Contents BIGLARI HOLDINGS INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (dollars in thousands) First Quarter 2026 2025 (Unaudited) Net earnings (loss) $ ( 14,531 ) $ ( 33,275 ) Foreign currency translation ( 220 ) 470 Total comprehensive income (loss) $ ( 14,751 ) $ ( 32,805 ) 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 first quarter of 2026 Balance at December 31, 2025 $ 1,138 $ 385,594 $ 590,211 $ ( 1,350 ) $ ( 452,164 ) $ 523,429 Net earnings (loss) ( 14,531 ) ( 14,531 ) Issuance of common stock under ATM program 9 14,911 14,920 Other comprehensive income (loss) ( 220 ) ( 220 ) Adjustment for holdings in investment partnerships ( 4,438 ) ( 4,438 ) Balance at March 31, 2026 $ 1,147 $ 400,505 $ 575,680 $ ( 1,570 ) $ ( 456,602 ) $ 519,160 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 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 See accompanying Notes to Consolidated Financial Statements. 3 Table of Contents BIGLARI HOLDINGS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands) First Quarter 2026 2025 (Unaudited) Operating activities Net earnings (loss) $ ( 14,531 ) $ ( 33,275 ) Adjustments to reconcile net earnings (loss) to operating cash flows: Depreciation and amortization 10,657 10,257 Provision for deferred income taxes 3,501 ( 9,156 ) Asset impairments and other non-cash expenses 274 — (Gains) losses on sale of assets 194 ( 9,060 ) Investment and investment partnerships (gains) losses 14,741 51,177 Distributions from investment partnerships 13,020 — Changes in receivables and inventories ( 2,477 ) 1,606 Changes in accounts payable and accrued expenses ( 5,047 ) 4,246 Net cash provided by operating activities 20,332 15,795 Investing activities Capital expenditures ( 6,967 ) ( 7,300 ) Proceeds from property and equipment disposals 138 9,559 Purchases of interests in limited partnerships ( 42,130 ) ( 17,320 ) Purchases of investments ( 53,414 ) ( 18,444 ) Sales of investments and redemptions of fixed maturity securities 7,230 13,611 Net cash used in investing activities ( 95,143 ) ( 19,894 ) Financing activities Payments on line of credit ( 6,000 ) ( 9,600 ) Proceeds from line of credit 1,250 13,000 Debt issuance costs ( 54 ) — Payments on note payable ( 2,250 ) — Proceeds from issuance of common stock 14,920 — Principal payments on direct financing lease obligations ( 1,809 ) ( 1,398 ) Net cash provided by financing activities 6,057 2,002 Effects of foreign currency exchange rate changes 47 40 Increase (decrease) in cash, cash equivalents and restricted cash ( 68,707 ) ( 2,057 ) Cash, cash equivalents and restricted cash at beginning of year 269,493 31,432 Cash, cash equivalents and restricted cash at end of first quarter $ 200,786 $ 29,375 First Quarter 2026 2025 (Unaudited) Cash and cash equivalents $ 200,075 $ 28,664 Restricted cash in other long-term assets 711 711 Cash, cash equivalents and restricted cash at end of first quarter $ 200,786 $ 29,375 See accompanying Notes to Consolidated Financial Statements. 4 Table of Contents BIGLARI HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2026 (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, 2025. 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. 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. Common Stock 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. The following table presents shares authorized, issued, and outstanding on March 31, 2026 and December 31, 2025. March 31, 2026 December 31, 2025 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 211,176 2,083,140 206,864 2,068,640 5 Table of Contents Note 2. Common Stock (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 ”. (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. March 31, 2026 March 31, 2025 Equivalent Class A common stock outstanding 627,804 620,592 Proportional ownership of Company stock held by investment partnerships 367,418 357,335 Equivalent Class A common stock for earnings per share 260,386 263,257 On January 16, 2026, we entered into an At-the-Market Offering Agreement with a third party providing for the sale of up to $ 500,000 in shares of our common stock. During the first quarter of 2026, the Company sold 4,312 shares of Class A Common Stock and 14,500 shares of Class B Common Stock . 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 losses for the first quarter of 2026 and 2025 were $ 1,287 and $ 1,585 , 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. 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, 2025 $ 772,585 $ 618,310 $ 154,275 Investment partnership gains (losses) ( 16,639 ) ( 3,185 ) ( 13,454 ) Contributions (net of distributions) 29,110 29,110 Changes in proportionate share of Company stock held 4,438 ( 4,438 ) Partnership interest at March 31, 2026 $ 785,056 $ 619,563 $ 165,493 6 Table of Contents Note 4. Investment Partnerships (continued) Fair Value Company Common Stock Carrying Value Partnership interest at December 31, 2024 $ 656,266 $ 454,539 $ 201,727 Investment partnership gains (losses) ( 115,439 ) ( 65,847 ) ( 49,592 ) Contributions (net of distributions) 17,320 17,320 Changes in proportionate share of Company stock held 320 ( 320 ) Partnership interest at March 31, 2025 $ 558,147 $ 389,012 $ 169,135 The carrying value of the investment partnerships net of deferred taxes is presented below. March 31, 2026 December 31, 2025 Carrying value of investment partnerships $ 165,493 $ 154,275 Deferred tax liability related to investment partnerships ( 24,831 ) ( 20,004 ) Carrying value of investment partnerships net of deferred taxes $ 140,662 $ 134,271 We expect that a majority of the $ 24,831 and $ 20,004 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 $ 456,602 and $ 452,164 as of March 31, 2026, and December 31, 2025, 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. First Quarter 2026 2025 Gains (losses) from investment partnerships $ ( 13,454 ) $ ( 49,592 ) Tax expense (benefit) ( 3,203 ) ( 10,166 ) Contribution to net earnings $ ( 10,251 ) $ ( 39,426 ) 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 quarters of 2026 and 2025. 7 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 March 31, 2026 $ 755,402 $ 297,280 Total liabilities as of March 31, 2026 $ 21,296 $ 159,882 Revenue for the first quarter of 2026 $ ( 2,107 ) $ ( 13,478 ) Earnings for the first quarter of 2026 $ ( 2,304 ) $ ( 15,363 ) Biglari Holdings’ average ownership interest during 2026 92.7 % 91.6 % Total assets as of December 31, 2025 $ 750,172 $ 293,051 Total liabilities as of December 31, 2025 $ 16,742 $ 163,900 Revenue for the first quarter of 2025 $ ( 84,132 ) $ ( 40,875 ) Earnings for the first quarter of 2025 $ ( 84,439 ) $ ( 43,373 ) Biglari Holdings’ average ownership interest during 2025 91.0 % 88.7 % 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. March 31, 2026 December 31, 2025 Land $ 133,523 $ 133,516 Buildings 173,940 169,307 Land and leasehold improvements 160,325 155,817 Equipment 214,206 213,395 Oil and gas properties 158,686 157,960 Construction in progress 2,064 2,195 842,744 832,190 Less accumulated depreciation, depletion, and amortization ( 474,928 ) ( 465,583 ) Property and equipment, net $ 367,816 $ 366,607 Depletion expense related to oil and gas properties was $ 2,697 and $ 3,058 during the first quarter of 2026 and 2025, respectively. We did not record any impairments to our restaurant long-lived assets in the first quarter of 2026 and 2025. We did not record any impairments to our oil and gas assets during the first quarter of 2026 and 2025. 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 during the first quarter of 2025, as 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. No gains were recorded during the first quarter of 2026. Property and equipment held for sale of $ 1,134 are recorded in other current assets as of March 31, 2026 and December 31, 2025. The assets classified as held for sale include properties which were previously company-operated restaurants. 8 Table of Contents Note 5. Property and Equipment (continued) During the first quarter of 2026 and 2025, the Company recognized net losses of $ 217 and $ 262 , 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, 2025 Goodwill $ 53,868 Accumulated impairment losses ( 1,300 ) $ 52,568 Change in foreign exchange rates during the first quarter of 2026 ( 13 ) Goodwill at March 31, 2026 $ 52,555 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 for goodwill or intangible assets during the first quarters of 2026 or 2025. Other Intangible Assets Intangible assets with indefinite lives are composed of the following. Trade Names Lease Rights Total Balance at December 31, 2025 Intangibles $ 15,876 $ 11,546 $ 27,422 Accumulated impairment losses — ( 3,748 ) ( 3,748 ) $ 15,876 $ 7,798 $ 23,674 Change in foreign exchange rates during the first quarter of 2026 — ( 149 ) ( 149 ) Balance at March 31, 2026 $ 15,876 $ 7,649 $ 23,525 Note 7. Restaurant Operations Revenues Restaurant operations revenues were as follows. First Quarter 2026 2025 Net sales $ 40,347 $ 41,615 Franchise partner fees 20,541 17,139 Franchise royalties and fees 3,126 3,489 Other 2,132 2,106 $ 66,146 $ 64,349 9 Table of Contents Note 7. Restaurant Operations Revenues (continued) 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 first quarter of 2026 and 2025, restaurant operations recognized $ 6,212 and $ 5,553 , 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. Note 8. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses include the following. March 31, 2026 December 31, 2025 Accounts payable $ 32,030 $ 34,173 Gift cards and other marketing 4,948 5,865 Insurance accruals 1,124 1,221 Compensation 5,039 5,975 Deferred revenue 5,886 3,517 Taxes payable 5,264 10,084 Oil and gas payable 1,485 1,253 Professional fees 4,298 4,226 Due to broker 4,910 4,343 Other 1,188 2,289 Accounts payable and accrued expenses $ 66,172 $ 72,946 10 Table of Contents Note 9. Note Payable and Lines of Credit Note payable and lines of credit include the following. Current portion of note payable and lines of credit March 31, 2026 December 31, 2025 Steak n Shake note payable $ 5,762 $ 5,820 Biglari Holdings line of credit 22,500 27,250 Total current portion of note payable and lines of credit $ 28,262 $ 33,070 Long-term portion of note payable and lines of credit Steak n Shake note payable $ 211,676 $ 213,920 Biglari Holdings line of credit — — Total long-term portion of note payable and lines of credit $ 211,676 $ 213,920 Biglari Holdings Line of Credit Biglari Holdings’ line of credit is $ 35,000 and matures on September 13, 2026. The line of credit includes customary covenants, as well as financial maintenance covenants. Our interest rate was 6.4 % and 6.7 % on March 31, 2026 and December 31, 2025, respectively. Steak n Shake Note Payable On September 30, 2025, Steak n Shake obtained a loan of $ 225,000 . The term of the loan is five years , with an interest rate fixed at 8.8 % per annum, and the loan will be amortized at a rate of 3.0 % per annum. The loan includes customary covenants as well as financial maintenance covenants and customary events of default. The debt is an obligation of Steak n Shake and the proceeds from the loan were distributed to Biglari Holdings. All of the debt is secured by real estate owned by Steak n Shake. Expected principal payments for the Steak n Shake note payable as of March 31, 2026, are as follows. Year Remainder of 2026 $ 4,500 2027 6,750 2028 6,750 2029 6,750 2030 196,875 Total Steak n Shake note payable 221,625 Less unamortized debt issuance costs 4,187 Total Steak n Shake note payable, net $ 217,438 Western Sizzlin Revolver Western Sizzlin’s available line of credit is $ 500 . As of March 31, 2026 and December 31, 2025, Western Sizzlin had no debt outstanding under its revolver. 11 Table of Contents Note 10. Unpaid Loss 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, 2026 and 2025 follows. March 31, March 31, 2026 2025 Balances at beginning of year: Gross liabilities $ 19,346 $ 18,028 Reinsurance recoverable on unpaid losses ( 1,126 ) ( 778 ) Net liabilities 18,220 17,250 Incurred losses and loss adjustment expenses: Current accident year 11,178 11,816 Prior accident years ( 1,222 ) 189 Total 9,956 12,005 Paid losses and loss adjustment expenses: Current accident year 5,986 7,559 Prior accident years 3,435 3,714 Total 9,421 11,273 Balances at March 31: Net liabilities 18,755 17,982 Reinsurance recoverable on unpaid losses 1,073 673 Gross liabilities $ 19,828 $ 18,655 We recorded net reductions of estimated ultimate liabilities for prior accident years of $ 1,222 in the first quarter of 2026 and net increases of estimated ultimate liabilities for prior accident years of $ 189 in the first quarter of 2025, which produced corresponding changes in incurred losses and loss adjustment expenses in those periods. These changes, as a percentage of the net liabilities at the beginning of each year, were 6.7 % in 2026 and 1.1 % in 2025. Note 11. Lease Assets and Obligations Lease obligations include the following. Current portion of lease obligations March 31, 2026 December 31, 2025 Finance lease liabilities $ 1,150 $ 1,233 Finance obligations 4,018 4,486 Operating lease liabilities 7,441 8,227 Total current portion of lease obligations $ 12,609 $ 13,946 Long-term lease obligations Finance lease liabilities $ 5,759 $ 6,157 Finance obligations 63,347 57,881 Operating lease liabilities 36,059 33,663 Total long-term lease obligations $ 105,165 $ 97,701 12 Table of Contents Note 11. Lease Assets and Obligations (continued) 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. 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. First Quarter 2026 2025 Finance lease costs: Amortization of right-of-use assets $ 272 $ 213 Interest on lease liabilities 125 74 Operating and variable lease costs 2,819 2,935 Sublease income ( 3,079 ) ( 2,608 ) Total lease costs $ 137 $ 614 Supplemental cash flow information related to leases is as follows. First Quarter 2026 2025 Cash paid for amounts included in the measurement of lease liabilities: Financing cash flows from finance leases $ 424 $ 335 Operating cash flows from finance leases $ 125 $ 74 Operating cash flows from operating leases $ 3,631 $ 2,728 Supplemental balance sheet information related to leases is as follows. March 31, 2026 December 31, 2025 Finance leases: Property and equipment, net $ 6,093 $ 6,420 Weighted-average lease terms and discount rates are as follows. March 31, 2026 Weighted-average remaining lease terms: Finance leases 13.75 years Operating leases 7.06 years Weighted-average discount rates: Finance leases 7.0 % Operating leases 7.0 % 13 Table of Contents Note 11. Lease Assets and Obligations (continued) Maturities of lease liabilities as of March 31, 2026 are as follows. Year Operating Leases Finance Leases Remainder of 2026 $ 7,665 $ 1,150 2027 9,373 1,416 2028 8,220 1,005 2029 6,839 751 2030 5,616 616 After 2030 17,403 6,105 Total lease payments 55,116 11,043 Less interest 11,616 4,134 Total lease liabilities $ 43,500 $ 6,909 Lease Income The components of lease income are as follows. First Quarter 2026 2025 Operating lease income $ 4,391 $ 3,932 Variable lease income 2,182 1,900 Total lease income $ 6,573 $ 5,832 The following table displays the Company’s future minimum rental receipts for non-cancelable leases and subleases as of March 31, 2026. Franchise partner leases and subleases are short-term leases and have been excluded from the table. Operating Leases Year Subleases Owned Properties Remainder of 2026 $ 457 $ 516 2027 544 699 2028 424 710 2029 338 725 2030 338 735 After 2030 19 3,059 Total future minimum receipts $ 2,120 $ 6,444 Note 12. Income Taxes In determining the quarterly provision for income taxes, the Company used an estimated annual effective tax rate for the first quarter of 2026 and 2025. 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. The income tax benefit for the first quarter of 2026 was $ 4,351 compared to an income tax benefit of $ 7,908 for the first quarter of 2025. The decreased income tax benefit between 2026 and 2025 is primarily attributable to lower tax benefits on pre-tax losses generated by the investment partnerships. 14 Table of Contents 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 or Level 3 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. 15 Table of Contents Note 14. Fair Value of Financial Assets (continued) As of March 31, 2026, and December 31, 2025, the fair values of financial assets were as follows. March 31, 2026 December 31, 2025 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 185,488 $ — $ — $ 185,488 $ 249,825 $ — $ — $ 249,825 Equity securities Consumer goods 50,137 — — 50,137 42,891 — — 42,891 Other 5,353 — 4,000 9,353 6,777 — 4,000 10,777 Bonds Government 50,880 2,095 — 52,975 12,835 2,142 — 14,977 Corporate — 549 — 549 — 554 — 554 Total assets at fair value $ 291,858 $ 2,644 $ 4,000 $ 298,502 $ 312,328 $ 2,696 $ 4,000 $ 319,024 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 $ 2,850 in service fees during the first quarters of 2026 and 2025. 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. 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 first quarters of 2026 and 2025 is presented in the tables which follow. 16 Table of Contents Note 16. Business Segment Reporting (continued) Restaurant First Quarter 2026 Steak n Shake Western Sizzlin Total Restaurants Revenue $ 63,766 $ 2,380 $ 66,146 Cost and expenses: Cost of food 11,846 819 12,665 Labor costs 12,289 569 12,858 Occupancy and other 12,575 724 13,299 Selling, general and administrative 17,335 83 17,418 Depreciation, amortization and impairment 7,024 6 7,030 Total costs and expenses 61,069 2,201 63,270 Earnings before income taxes $ 2,697 $ 179 $ 2,876 First Quarter 2025 Steak n Shake Western Sizzlin Total Restaurants Revenue $ 61,916 $ 2,433 $ 64,349 Cost and expenses: Cost of food 11,612 852 12,464 Labor costs 12,848 591 13,439 Occupancy and other 12,482 706 13,188 Selling, general and administrative 15,415 39 15,454 Depreciation, amortization and impairment 6,471 19 6,490 Total costs and expenses 58,828 2,207 61,035 Earnings before income taxes $ 3,088 $ 226 $ 3,314 Insurance First Quarter 2026 First Guard Southern Pioneer Total Underwriting Investment Income Other Total Insurance Revenue $ 9,046 $ 8,755 $ 17,801 $ 651 $ 486 $ 18,938 Cost and expenses: Insurance losses 5,907 4,049 9,956 — — 9,956 Underwriting expenses 1,568 3,394 4,962 — ( 96 ) 4,866 Other segment items — — — — 875 875 Total costs and expenses 7,475 7,443 14,918 — 779 15,697 Earnings before income taxes $ 1,571 $ 1,312 $ 2,883 $ 651 $ ( 293 ) $ 3,241 17 Table of Contents Note 16. Business Segment Reporting (continued) First Quarter 2025 First Guard Southern Pioneer Total Underwriting Investment Income Other Total Insurance Revenue $ 9,209 $ 8,556 $ 17,765 $ 837 $ 747 $ 19,349 Cost and expenses: Insurance losses 6,282 5,723 12,005 — — 12,005 Underwriting expenses 1,712 3,335 5,047 — — 5,047 Other segment items — — — — 760 760 Total costs and expenses 7,994 9,058 17,052 — 760 17,812 Earnings before income taxes $ 1,215 $ ( 502 ) $ 713 $ 837 $ ( 13 ) $ 1,537 Other segment items include general and administrative costs, depreciation, and other income. Oil and Gas First Quarter 2026 Abraxas Petroleum Southern Oil Total Oil and Gas Revenue $ 6,126 $ 3,010 $ 9,136 Cost and expenses: Production costs 2,734 1,190 3,924 Depreciation, depletion and accretion 1,299 1,575 2,874 General and administrative 588 737 1,325 Total costs and expenses 4,621 3,502 8,123 Earnings before income taxes $ 1,505 $ ( 492 ) $ 1,013 First Quarter 2025 Abraxas Petroleum Southern Oil Total Oil and Gas Revenue $ 5,890 $ 4,040 $ 9,930 Cost and expenses: Production costs 2,446 1,600 4,046 Depreciation, depletion and accretion 1,933 1,323 3,256 General and administrative 649 654 1,303 Total costs and expenses 5,028 3,577 8,605 Gains on sales of properties 9,323 — 9,323 Earnings before income taxes $ 10,185 $ 463 $ 10,648 18 Table of Contents Note 16. Business Segment Reporting (continued) Maxim First Quarter 2026 2025 Revenue $ 3,261 $ 1,407 Cost and expenses: Licensing and media cost 2,874 1,651 General and administrative 39 43 Depreciation and amortization 191 70 Total costs and expenses 3,104 1,764 Earnings before income taxes $ 157 $ ( 357 ) 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. Revenues Earnings (losses) before income taxes 2026 2025 2026 2025 Total operating businesses $ 97,481 $ 95,035 $ 7,287 $ 15,142 Investment partnership gains (losses) — — ( 13,454 ) ( 49,592 ) Investment gains (losses) — — ( 1,287 ) ( 1,585 ) Interest expenses not allocated to segments — — ( 5,651 ) ( 900 ) Corporate and other — — ( 5,777 ) ( 4,248 ) $ 97,481 $ 95,035 $ ( 18,882 ) $ ( 41,183 ) 19 Table of Contents