Biglari Holdings Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS BIGLARI HOLDINGS INC. CONSOLIDATED BALANCE SHEETS (dollars in thousands) June 30, 2026 December 31, 2025 (Unaudited) Assets Current assets: Cash and cash equivalents $ 68,394 $ 268,782 Investments 274,321 69,050 Receivables 24,994 23,283 Inventories 3,884 3,769 Other current assets 12,329 13,642 Total current assets 383,922 378,526 Property and equipment 366,455 366,607 Operating lease assets 43,255 40,052 Goodwill and other intangible assets 76,014 76,242 Investment partnerships 178,700 154,275 Other assets 10,238 9,681 Total assets $ 1,058,584 $ 1,025,383 Liabilities and shareholders’ equity Liabilities Current liabilities: Accounts payable and accrued expenses $ 77,802 $ 72,946 Losses and loss adjustment expenses 20,318 18,220 Unearned premiums 18,351 17,813 Current portion of lease obligations 12,136 13,946 Current portion of note payable and lines of credit 28,270 33,070 Total current liabilities 156,877 155,995 Lease obligations 107,811 97,701 Deferred taxes 23,202 18,029 Note payable 210,231 213,920 Asset retirement obligations 15,903 15,542 Other liabilities 772 767 Total liabilities 514,796 501,954 Shareholders’ equity Common stock 1,147 1,138 Additional paid-in capital 400,505 385,594 Retained earnings 615,606 590,211 Accumulated other comprehensive loss ( 1,638 ) ( 1,350 ) Treasury stock, at cost ( 471,832 ) ( 452,164 ) Biglari Holdings Inc. shareholders’ equity 543,788 523,429 Total liabilities and shareholders’ equity $ 1,058,584 $ 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) Second Quarter First Six Months 2026 2025 2026 2025 (Unaudited) (Unaudited) Revenues Restaurant operations $ 74,727 $ 72,011 $ 140,873 $ 136,360 Insurance premiums and other 19,030 18,823 37,968 38,172 Oil and gas 11,260 7,498 20,396 17,428 Licensing and media 3,507 2,287 6,768 3,694 Total revenues 108,524 100,619 206,005 195,654 Costs and expenses Restaurant cost of sales 41,127 40,039 78,592 77,797 Insurance losses and underwriting expenses 15,133 15,932 29,955 32,984 Oil and gas production costs 4,147 2,880 8,071 6,926 Licensing and media costs 3,335 2,421 6,209 4,072 Selling, general and administrative 26,230 22,853 51,102 44,220 Gain on sale of oil and gas properties ( 4,803 ) ( 794 ) ( 4,803 ) ( 10,117 ) Impairments — 1,251 — 1,251 Depreciation, depletion, and amortization 10,149 10,272 20,806 20,529 Interest expense on leases 1,400 1,240 2,757 2,573 Interest expense on borrowings 5,532 852 11,183 1,752 Total costs and expenses 102,250 96,946 203,872 181,987 Other income Investment gains (losses) 9,708 2,925 8,421 1,340 Investment partnership gains (losses) 35,637 58,504 22,183 8,912 Total other income (expenses) 45,345 61,429 30,604 10,252 Earnings (loss) before income taxes 51,619 65,102 32,737 23,919 Income tax expense (benefit) 11,693 14,171 7,342 6,263 Net earnings (loss) $ 39,926 $ 50,931 $ 25,395 $ 17,656 Net earnings (loss) per average equivalent Class A share * $ 158.17 $ 194.57 $ 99.78 $ 67.26 *Net earnings (loss) per average equivalent Class B share outstanding are one-fifth of the average equivalent Class A share or $ 31.63 and $ 19.96 for the second quarter and first six months of 2026, respectively, and $ 38.91 and $ 13.45 for the second quarter and first six months of 2025, 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 2026 2025 2026 2025 (Unaudited) (Unaudited) Net earnings (loss) $ 39,926 $ 50,931 $ 25,395 $ 17,656 Foreign currency translation ( 68 ) 1,010 ( 288 ) 1,480 Comprehensive income (loss) $ 39,858 $ 51,941 $ 25,107 $ 19,136 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 2026 2025 (Unaudited) Operating activities Net earnings (loss) $ 25,395 $ 17,656 Adjustments to reconcile net earnings (loss) to operating cash flows: Depreciation, depletion, and amortization 20,806 20,529 Provision for deferred income taxes 5,202 11,254 Asset impairments and other non-cash expenses 528 1,251 Gains on sale of assets ( 4,878 ) ( 11,032 ) Investment and investment partnership gains and losses ( 30,604 ) ( 10,252 ) Return on partnership investments 13,020 35,000 Changes in receivables, inventories and other assets ( 2,210 ) 559 Changes in accounts payable and accrued expenses 8,021 ( 7,023 ) Net cash provided by operating activities 35,280 57,942 Investing activities Capital expenditures ( 13,632 ) ( 10,004 ) Proceeds from property and equipment disposals 6,132 12,477 Purchases of interests in limited partnerships ( 63,530 ) ( 30,065 ) Return of partnership investments 28,600 — Purchases of investments ( 254,272 ) ( 31,479 ) Sales of investments and redemptions of fixed maturity securities 58,336 31,910 Net cash used in investing activities ( 238,366 ) ( 27,161 ) Financing activities Payments on line of credit ( 6,000 ) ( 53,000 ) Proceeds from line of credit 1,250 27,000 Debt issuance costs ( 375 ) — Payments on note payable ( 3,938 ) — Proceeds from issuance of common stock 14,920 — Principal payments on direct financing lease obligations ( 3,141 ) ( 2,778 ) Net cash provided by (used in) financing activities 2,716 ( 28,778 ) Effect of exchange rate changes on cash ( 18 ) 42 Increase (decrease) in cash, cash equivalents and restricted cash ( 200,388 ) 2,045 Cash, cash equivalents and restricted cash at beginning of year 269,493 31,432 Cash, cash equivalents and restricted cash at end of second quarter $ 69,105 $ 33,477 June 30, 2026 2025 (Unaudited) Cash and cash equivalents $ 68,394 $ 32,766 Restricted cash in other long-term assets 711 711 Cash, cash equivalents and restricted cash at end of second quarter $ 69,105 $ 33,477 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 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 9 14,911 14,920 Other comprehensive 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 Net earnings (loss) 39,926 39,926 Other comprehensive loss ( 68 ) ( 68 ) Adjustment for holdings in investment partnerships ( 15,230 ) ( 15,230 ) Balance at June 30, 2026 $ 1,147 $ 400,505 $ 615,606 $ ( 1,638 ) $ ( 471,832 ) $ 543,788 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 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 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 See accompanying Notes to Consolidated Financial Statements. 5 Table of Contents BIGLARI HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 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. 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. The following table presents shares authorized, issued and outstanding on June 30, 2026 and December 31, 2025. June 30, 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 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. 6 Table of Contents Note 2. Earnings Per Share (continued) Second Quarter First Six Months 2026 2025 2026 2025 Equivalent Class A common stock outstanding 627,804 620,592 625,925 620,592 Proportional ownership of Company stock held by investment partnerships 375,384 358,832 371,423 358,088 Equivalent Class A common stock for earnings per share 252,420 261,760 254,502 262,504 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 2026 were $ 9,708 and $ 8,421 , respectively. Investment gains in the second quarter and first six months of 2025 were $ 2,925 and $ 1,340 , 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 Company evaluates the nature of each distribution to determine whether it represents a return on investment or a return of investment. Distributions determined to be returns on investment are classified as operating cash inflows, while distributions determined to be returns of investments are classified as investing cash inflows. The Company’s determination is based on the nature of the activities that generated the distributions and other available information that is relevant. 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) 191,873 169,690 22,183 Contributions (net of distributions) 21,910 21,910 Changes in proportionate share of Company stock held 19,668 ( 19,668 ) Partnership interest at June 30, 2026 $ 986,368 $ 807,668 $ 178,700 7 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) 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 The carrying value of the investment partnerships net of deferred taxes is presented below. June 30, 2026 December 31, 2025 Carrying value of investment partnerships $ 178,700 $ 154,275 Deferred tax liability related to investment partnerships ( 31,985 ) ( 20,004 ) Carrying value of investment partnerships net of deferred taxes $ 146,715 $ 134,271 We expect that a majority of the $ 31,985 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 $ 471,832 and $ 452,164 at June 30, 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. Second Quarter First Six Months 2026 2025 2026 2025 Gains (losses) from investment partnerships $ 35,637 $ 58,504 $ 22,183 $ 8,912 Tax expense (benefit) 7,710 12,310 4,507 2,144 Contribution to net earnings (loss) $ 27,927 $ 46,194 $ 17,676 $ 6,768 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 2026 and 2025. 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, 2026 $ 980,989 $ 340,347 Total liabilities as of June 30, 2026 $ 30,068 $ 180,513 Revenue for the first six months of 2026 $ 184,628 $ 26,412 Earnings for the first six months of 2026 $ 184,154 $ 22,622 Biglari Holdings’ average ownership interest during 2026 92.8 % 91.7 % 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 six months of 2025 $ 58,537 $ 23,257 Earnings for the first six months of 2025 $ 57,970 $ 18,396 Biglari Holdings’ average ownership interest during 2025 91.2 % 88.8 % 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, 2026 December 31, 2025 Land $ 134,896 $ 133,516 Buildings 177,502 169,307 Land and leasehold improvements 161,518 155,817 Equipment 211,885 213,395 Oil and gas properties 159,302 157,960 Construction in progress 2,134 2,195 847,237 832,190 Less accumulated depreciation, depletion, and amortization ( 480,782 ) ( 465,583 ) Property and equipment, net $ 366,455 $ 366,607 Depletion expense related to oil and gas properties was $ 4,932 and $ 5,966 during the first six months of 2026 and 2025, respectively. No impairment to restaurant long-lived assets was recorded in the second quarter and first six months of 2026. The Company recorded an impairment to restaurant long-lived assets related to underperforming stores of $ 1,251 in the second quarter and first six months of 2025. We did not record any impairments to our oil and gas assets during the second quarter and first six months 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 $ 4,803 and $ 794 during the second quarter of 2026 and 2025, respectively, and recorded gains of $ 4,803 and $ 10,117 during the first six months of 2026 and 2025, 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 $ 560 and $ 1,134 are recorded in other assets as of June 30, 2026 and December 31, 2025, respectively. The assets classified as held for sale include properties which were previously company-operated restaurants. During the first six months of 2026 and 2025, the Company recognized net gains of $ 77 and $ 807 , 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 six months of 2026 ( 18 ) Goodwill at June 30, 2026 $ 52,550 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 2026 or 2025. We performed 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 2026 or 2025. An impairment of Western Sizzlin’s goodwill may be necessary if a significant decline in franchise units or company-operated units occurs. There was no impairment recorded for intangible assets during the first six months 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 Impairments prior to 2025 — ( 3,748 ) ( 3,748 ) 15,876 7,798 23,674 Change in foreign exchange rates during the first six months of 2026 — ( 210 ) ( 210 ) Balance at June 30, 2026 $ 15,876 $ 7,588 $ 23,464 10 Table of Contents Note 7. Restaurant Operations Revenues Restaurant operations revenues were as follows. Second Quarter First Six Months 2026 2025 2026 2025 Net sales $ 45,648 $ 46,858 $ 85,995 $ 88,473 Franchise partner fees 23,141 20,150 43,682 37,289 Franchise royalties and fees 3,350 3,128 6,476 6,617 Other 2,588 1,875 4,720 3,981 $ 74,727 $ 72,011 $ 140,873 $ 136,360 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 2026 and 2025, restaurant operations recognized $ 6,482 and $ 5,887 , respectively, in franchise partner fees related to rental income. During the first six months ended June 30, 2026 and June 30, 2025, restaurant operations recognized $ 12,694 and $ 11,440 , 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, 2026 December 31, 2025 Accounts payable $ 30,364 $ 34,173 Gift cards and other marketing 4,925 5,865 Insurance accruals 1,188 1,221 Compensation 6,493 5,975 Deferred revenue 4,749 3,517 Taxes payable 15,015 10,084 Oil and gas payable 1,797 1,253 Professional fees 6,698 4,226 Due to broker 4,737 4,343 Other 1,836 2,289 Accounts payable and accrued expenses $ 77,802 $ 72,946 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 June 30, 2026 December 31, 2025 Steak n Shake note payable $ 5,770 $ 5,820 Biglari Holdings line of credit 22,500 27,250 Total current portion of note payable and lines of credit $ 28,270 $ 33,070 Long-term portion of note payable Steak n Shake note payable $ 210,231 $ 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 June 30, 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. 12 Table of Contents Note 9. Note Payable and Lines of Credit (continued) Expected principal payments for the Steak n Shake note payable as of June 30, 2026, are as follows. Year Remainder of 2026 $ 2,812 2027 6,750 2028 6,750 2029 6,750 2030 196,875 Total Steak n Shake note payable 219,937 Less unamortized debt issuance costs 3,936 Total Steak n Shake note payable, net $ 216,001 Western Sizzlin Revolver Western Sizzlin’s available line of credit is $ 500 . As of June 30, 2026 and December 31, 2025, there was no debt outstanding under its revolver. 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, 2026 and 2025 follows. June 30, 2026 June 30, 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 23,338 23,594 Prior accident years ( 2,833 ) 872 Total 20,505 24,466 Paid losses and loss adjustment expenses: Current accident year 15,708 18,663 Prior accident years 4,004 5,850 Total 19,712 24,513 Balances at June 30: Net liabilities 19,013 17,203 Reinsurance recoverable on unpaid losses 1,305 612 Gross liabilities $ 20,318 $ 17,815 We recorded net reductions of $ 2,833 for estimated ultimate liabilities for prior accident years in the first six months of 2026, and net increases of $ 872 in the first six months of 2025. These changes as a percentage of the net liabilities at the beginning of each year were 15.5 % in 2026 and 5.1 % in 2025. 13 Table of Contents Note 11. Lease Assets and Obligations Lease obligations include the following. Current portion of lease obligations June 30, 2026 December 31, 2025 Finance lease liabilities $ 1,110 $ 1,233 Finance obligations 3,977 4,486 Operating lease liabilities 7,049 8,227 Total current portion of lease obligations $ 12,136 $ 13,946 Long-term lease obligations Finance lease liabilities $ 5,479 $ 6,157 Finance obligations 65,138 57,881 Operating lease liabilities 37,194 33,663 Total long-term lease obligations $ 107,811 $ 97,701 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. Second Quarter First Six Months 2026 2025 2026 2025 Finance lease costs: Amortization of right-of-use assets $ 272 $ 226 $ 544 $ 439 Interest on lease liabilities 119 87 244 161 Operating and variable lease costs 2,935 2,862 5,754 5,798 Sublease income ( 3,183 ) ( 2,512 ) ( 6,262 ) ( 5,120 ) Total lease costs $ 143 $ 663 $ 280 $ 1,278 Supplemental cash flow information related to leases is as follows. First Six Months 2026 2025 Cash paid for amounts included in the measurement of lease liabilities: Financing cash flows from finance leases $ 721 $ 625 Operating cash flows from finance leases $ 244 $ 161 Operating cash flows from operating leases $ 6,385 $ 5,410 Supplemental balance sheet information related to leases is as follows. 14 Table of Contents Note 11. Lease Assets and Obligations (continued) June 30, 2026 December 31, 2025 Finance leases: Property and equipment, net $ 5,800 $ 6,420 Weighted-average lease terms and discount rates are as follows. June 30, 2026 Weighted-average remaining lease terms: Finance leases 13.91 years Operating leases 7.20 years Weighted-average discount rates: Finance leases 7.0 % Operating leases 7.0 % Maturities of lease liabilities as of June 30, 2026 are as follows. Year Operating Leases Finance Leases Remainder of 2026 $ 4,822 $ 733 2027 9,805 1,414 2028 8,722 1,003 2029 7,382 749 2030 6,273 615 After 2030 19,173 6,064 Total lease payments 56,177 10,578 Less interest 11,934 3,989 Total lease liabilities $ 44,243 $ 6,589 Lease Income The components of lease income recorded in restaurant operations are as follows. Second Quarter First Six Months 2026 2025 2026 2025 Operating lease income $ 4,383 $ 3,914 $ 8,773 $ 7,846 Variable lease income 2,601 2,288 4,784 4,188 Total lease income $ 6,984 $ 6,202 $ 13,557 $ 12,034 The following table displays the Company’s future minimum rental receipts for non-cancelable leases and subleases as of June 30, 2026. Franchise partner leases and subleases are short-term leases and have been excluded from the table. 15 Table of Contents Note 11. Lease Assets and Obligations (continued) Operating Leases Year Subleases Owned Properties Remainder of 2026 $ 331 $ 346 2027 622 704 2028 424 715 2029 338 730 2030 338 740 After 2029 19 3,082 Total future minimum receipts $ 2,072 $ 6,317 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 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. Income tax expense for the second quarter of 2026 was $ 11,693 compared to an income tax expense of $ 14,171 for the second quarter of 2025. Income tax expense for the first six months of 2026 was $ 7,342 compared to an income tax expense of $ 6,263 for the first six months of 2025. The change in income tax expense between 2026 and 2025 is primarily attributable to taxes on income generated by the investment partnerships. 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. 16 Table of Contents Note 14. Fair Value of Financial Assets (continued) • 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. As of June 30, 2026 and December 31, 2025, the fair values of financial assets were as follows. June 30, 2026 December 31, 2025 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 39,693 $ — $ — $ 39,693 $ 249,825 $ — $ — $ 249,825 Equity securities Consumer goods 56,140 — — 56,140 42,891 — — 42,891 Other 7,393 — 3,000 10,393 6,777 — 4,000 10,777 Bonds Government 207,700 1,103 — 208,803 12,835 2,142 — 14,977 Corporate — 549 — 549 — 554 — 554 Total assets at fair value $ 310,926 $ 1,652 $ 3,000 $ 315,578 $ 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 $ 5,700 in service fees during the first six months 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. There were no incentive payments accrued during the first six months of 2026 and 2025. 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 to allocate resources and capital, together with perceived risks and opportunities in the insurance markets that affect rates and risks of loss. There are no forecasted premiums. For most non-insurance businesses, pre-tax earnings are considered in allocating resources and capital. The chief operating decision-maker generally considers actual operating results, as well as unique perceived risks and opportunities associated with the individual operating businesses. A disaggregation of our consolidated data for the second quarters and first six months of 2026 and 2025 is presented in the tables which follow. Restaurant Second Quarter 2026 Steak n Shake Western Sizzlin Total Restaurants Revenue $ 72,098 $ 2,629 $ 74,727 Cost and expenses: Cost of food 14,248 955 15,203 Labor costs 13,119 630 13,749 Occupancy and other 12,596 979 13,575 Selling, general and administrative 16,750 229 16,979 Depreciation, amortization and impairment 6,932 26 6,958 Total costs and expenses 63,645 2,819 66,464 Earnings before income taxes $ 8,453 $ ( 190 ) $ 8,263 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 18 Table of Contents Note 16. Business Segment Reporting (continued) First Six Months 2026 Steak n Shake Western Sizzlin Total Restaurants Revenue $ 135,864 $ 5,009 $ 140,873 Cost and expenses: Cost of food 26,094 1,774 27,868 Labor costs 25,408 1,199 26,607 Occupancy and other 25,171 1,703 26,874 Selling, general and administrative 34,085 312 34,397 Depreciation, amortization and impairment 13,956 32 13,988 Total costs and expenses 124,714 5,020 129,734 Earnings before income taxes $ 11,150 $ ( 11 ) $ 11,139 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 Insurance Second Quarter 2026 First Guard Southern Pioneer Total Underwriting Investment Income Other Total Insurance Revenue $ 9,195 $ 8,498 $ 17,693 $ 717 $ 620 $ 19,030 Cost and expenses: Insurance losses 5,992 4,558 10,550 — — 10,550 Underwriting expenses 1,586 2,997 4,583 — — 4,583 Other segment items — — — — 921 921 Total costs and expenses 7,578 7,555 15,133 — 921 16,054 Earnings before income taxes $ 1,617 $ 943 $ 2,560 $ 717 $ ( 301 ) $ 2,976 19 Table of Contents Note 16. Business Segment Reporting (continued) 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 First Six Months 2026 First Guard Southern Pioneer Total Underwriting Investment Income Other Total Insurance Revenue $ 18,241 $ 17,253 $ 35,494 $ 1,368 $ 1,106 $ 37,968 Cost and expenses: Insurance losses 11,899 8,607 20,506 — — 20,506 Underwriting expenses 3,154 6,391 9,545 — ( 96 ) 9,449 Other segment items — — — — 1,796 1,796 Total costs and expenses 15,053 14,998 30,051 — 1,700 31,751 Earnings before income taxes $ 3,188 $ 2,255 $ 5,443 $ 1,368 $ ( 594 ) $ 6,217 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 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 2026 Abraxas Petroleum Southern Oil Total Oil and Gas Revenue $ 7,296 $ 3,964 $ 11,260 Cost and expenses: Production costs 2,321 1,826 4,147 Depreciation, depletion and accretion 821 1,570 2,391 General and administrative 1,788 659 2,447 Total costs and expenses 4,930 4,055 8,985 Gains on sales of properties 4,803 — 4,803 Earnings before income taxes $ 7,169 $ ( 91 ) $ 7,078 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 First Six Months 2026 Abraxas Petroleum Southern Oil Total Oil and Gas Revenue $ 13,422 $ 6,974 $ 20,396 Cost and expenses: Production costs 5,055 3,016 8,071 Depreciation, depletion and accretion 2,120 3,145 5,265 General and administrative 2,376 1,396 3,772 Total costs and expenses 9,551 7,557 17,108 Gains on sales of properties 4,803 — 4,803 Earnings before income taxes $ 8,674 $ ( 583 ) $ 8,091 21 Table of Contents Note 16. Business Segment Reporting (continued) 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 Brand Licensing Maxim Second Quarter First Six Months 2026 2025 2026 2025 Revenue $ 3,507 $ 2,287 $ 6,768 $ 3,694 Cost and expenses: Licensing and media cost 3,335 2,421 6,209 4,072 General and administrative 28 33 67 76 Depreciation and amortization 228 100 419 170 Total costs and expenses 3,591 2,554 6,695 4,318 Earnings before income taxes $ ( 84 ) $ ( 267 ) $ 73 $ ( 624 ) 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 2026 2025 2026 2025 Total operating businesses $ 108,524 $ 100,619 $ 18,233 $ 9,078 Investment partnership gains (losses) — — 35,637 58,504 Investment gains (losses) — — 9,708 2,925 Interest expenses not allocated to segments — — ( 5,532 ) ( 852 ) Corporate and other — — ( 6,427 ) ( 4,553 ) $ 108,524 $ 100,619 $ 51,619 $ 65,102 22 Table of Contents Note 16. Business Segment Reporting (continued) First Six Months Revenues Earnings (losses) before income taxes 2026 2025 2026 2025 Total operating businesses $ 206,005 $ 195,654 $ 25,520 $ 24,220 Investment partnership gains (losses) — — 22,183 8,912 Investment gains (losses) — — 8,421 1,340 Interest expenses not allocated to segments — — ( 11,183 ) ( 1,752 ) Corporate and other — — ( 12,204 ) ( 8,801 ) $ 206,005 $ 195,654 $ 32,737 $ 23,919 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. Net earnings (loss) are disaggregated in the table that follows. Amounts are recorded after deducting income taxes. Second Quarter First Six Months 2026 2025 2026 2025 Operating businesses: Restaurant $ 6,234 $ 4,555 $ 8,272 $ 6,744 Insurance 2,001 1,399 4,886 2,600 Oil and gas 5,714 849 6,621 9,147 Brand licensing (62) (198) 54 (465) Interest expense (4,192) (656) (8,473) (1,349) Total operating businesses 9,695 5,949 11,360 16,677 Corporate and other (5,090) (3,530) (9,638) (6,819) Investment partnership gains (losses) 27,927 46,194 17,676 6,768 Investment gains (losses) 7,394 2,318 5,997 1,030 Net earnings (loss) $ 39,926 $ 50,931 $ 25,395 $ 17,656 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 428 company-operated and franchise restaurants as of June 30, 2026. Steak n Shake Western Sizzlin Company- operated Franchise Partner Traditional Franchise Company- operated Franchise Total Total stores as of December 31, 2025 131 179 94 3 28 435 Corporate stores transitioned (4) 4 — — — — Net restaurants opened (closed) (1) — (4) (1) (1) (7) Total stores as of June 30, 2026 126 183 90 2 27 428 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 As of June 30, 2026, eight of the 126 company-operated Steak n Shake stores were closed. Of the eight locations, Steak n Shake plans to reopen two locations and sell or lease six locations. 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 2026 2025 2026 2025 Revenue Net sales $ 45,648 $ 46,858 $ 85,995 $ 88,473 Franchise partner fees 23,141 20,150 43,682 37,289 Franchise royalties and fees 3,350 3,128 6,476 6,617 Other revenue 2,588 1,875 4,720 3,981 Total revenue 74,727 72,011 140,873 136,360 Restaurant cost of sales Cost of food 15,203 33.3 % 14,167 30.2 % 27,868 32.4 % 26,631 30.1 % Labor costs 13,749 30.1 % 14,020 29.9 % 26,607 30.9 % 27,460 31.0 % Occupancy and other 12,175 26.7 % 11,852 25.3 % 24,117 28.0 % 23,706 26.8 % Total cost of sales 41,127 40,039 78,592 77,797 Selling, general and administrative General and administrative 12,348 16.5 % 12,776 17.7 % 24,184 17.2 % 24,704 18.1 % Marketing 4,539 6.1 % 4,865 6.8 % 9,966 7.1 % 8,097 5.9 % Other expenses (income) 92 0.1 % (1,207) (1.7) % 247 0.2 % (913) (0.7) % Total selling, general and administrative 16,979 22.7 % 16,434 22.8 % 34,397 24.4 % 31,888 23.4 % Impairments — — % 1,251 1.7 % — — % 1,251 0.9 % Depreciation and amortization 6,958 9.3 % 6,612 9.2 % 13,988 9.9 % 13,102 9.6 % Interest on finance leases and obligations 1,400 1,240 2,757 2,573 Earnings before income taxes 8,263 6,435 11,139 9,749 Income tax expense 2,029 1,880 2,867 3,005 Contribution to net earnings $ 6,234 $ 4,555 $ 8,272 $ 6,744 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 2026 were $45,648 and $85,995, respectively, representing a decrease of $1,210 or 2.6% and $2,478 or 2.8%, compared to the second quarter and first six months of 2025, respectively. Total revenue decreased due to fewer company-operated units in 2026 compared to 2025. Steak n Shake’s domestic same-store sales increased 11.9% during the second quarter of 2026. 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. Fees generated by our franchise partners were $23,141 during the second quarter of 2026, as compared to $20,150 during the second quarter of 2025. Franchise partner fees were $43,682 and $37,289 during the first six months of 2026 and 2025, respectively. Franchise partner same-store sales increased 14.5%. 26 Table of Contents