What changed in this filing

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Item 1. Financial Statements

2022-11-04 compared with 2022-08-05 · 143 added, 85 removed, 554 unchanged (29% of the section changed)

3 unchanged sentences

(dollars in thousands)

September 30,

2022 December 31,

20 unchanged sentences

Lease obligations 95,980 104,479

Line of credit 30,000 —

Deferred taxes 28,515 46,533

10 unchanged sentences

shareholders’ equity 536,485 587,696

Noncontrolling interests 8,923 —

Total shareholders' equity 545,408 587,696

Total liabilities and shareholders’ equity $ 862,145 $ 894,807

3 unchanged sentences

(dollars in thousands except per share amounts)

Second Quarter First Six Months

Third Quarter First Nine Months

2022 2021 2022 2021

14 unchanged sentences

Interest expense on leases 1,372 1,462 4,169 4,619

Interest expense on note payable — — — 1,121

Interest expense on borrowings 67 — 67 1,121

79,206 81,329 238,666 249,122

5 unchanged sentences

Net earnings (loss) 32,039 ( 10,669 ) ( 42,039 ) 40,301

Earnings attributable to noncontrolling interest 34 — 34 —

Net earnings (loss) attributable to Biglari Holdings Inc.

shareholders $ 32,005 $ ( 10,669 ) $ ( 42,073 ) $ 40,301

Net earnings (loss) per equivalent Class A share * $ 109.13 $ ( 33.74 ) $ ( 140.30 ) $ 125.79

*Net earnings (loss) per equivalent Class B share outstanding are one-fifth of the equivalent Class A share or $( 48.87 ) and $( 48.86 ) for the second quarter and first six months of 2022, respectively, and $( 12.81 ) and $ 31.61 for the second quarter and first six months of 2021, respectively.

*Net earnings (loss) per equivalent Class B share outstanding are one-fifth of the equivalent Class A share or $ 21.83 and $( 28.06 ) for the third quarter and first nine months of 2022, respectively, and $( 6.75 ) and $ 25.16 for the third quarter and first nine months of 2021, respectively.

See accompanying Notes to Consolidated Financial Statements.

BIGLARI HOLDINGS INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(dollars in thousands)

Second Quarter First Six Months

Third Quarter First Nine Months

2022 2021 2022 2021

2 unchanged sentences

Foreign currency translation ( 618 ) ( 49 ) ( 1,870 ) ( 378 )

Total comprehensive income (loss) $ ( 74,801 ) $ ( 20,622 ) $ ( 75,330 ) $ 50,641

Comprehensive income (loss) 31,421 ( 10,718 ) ( 43,909 ) 39,923

Comprehensive income attributable to noncontrolling interests 34 — 34 —

Total comprehensive income (loss) attributable to Biglari Holdings Inc.

shareholders $ 31,387 $ ( 10,718 ) $ ( 43,943 ) $ 39,923

See accompanying Notes to Consolidated Financial Statements.

2 unchanged sentences

(dollars in thousands)

First Six Months

First Nine Months

Operating activities

13 unchanged sentences

Proceeds from property and equipment disposals 2,201 2,749

Acquisition of a business, net of cash acquired ( 54,899 ) —

Purchases of limited partner interests ( 23,886 ) ( 4,800 )

3 unchanged sentences

Financing activities

Proceeds from revolving credit facility 30,000 —

Principal payments on long-term debt — ( 149,952 )

Principal payments on direct financing lease obligations ( 4,647 ) ( 4,634 )

Net cash used in financing activities ( 3,134 ) ( 153,136 )

Net cash provided by (used in) financing activities 25,353 ( 154,586 )

Effect of exchange rate changes on cash ( 150 ) ( 85 )

Increase (decrease) in cash, cash equivalents and restricted cash ( 1,837 ) 1,209

Increase in cash, cash equivalents and restricted cash 22,493 792

Cash, cash equivalents and restricted cash at beginning of year 43,687 29,666

Cash, cash equivalents and restricted cash at end of second quarter $ 41,850 $ 30,875

First Six Months

Cash, cash equivalents and restricted cash at end of third quarter $ 66,180 $ 30,458

First Nine Months

Cash and cash equivalents $ 64,842 $ 27,795

Restricted cash in other long-term assets 1,338 2,663

Cash, cash equivalents and restricted cash at end of second quarter $ 41,850 $ 30,875

Cash, cash equivalents and restricted cash at end of third quarter $ 66,180 $ 30,458

See accompanying Notes to Consolidated Financial Statements.

2 unchanged sentences

(dollars in thousands)

Biglari Holdings Inc.

Shareholders’ Equity

Stock Additional Paid-In

Capital Retained

Earnings Accumulated

Comprehensive

Income (Loss) Treasury

Earnings Accumulated Other Comprehensive Income (Loss) Treasury

Stock Non-controlling Interests Total

Balance at December 31, 2021 $ 1,138 $ 381,788 $ 608,528 $ ( 1,907 ) $ ( 401,851 ) $ — $ 587,696

7 unchanged sentences

Balance at June 30, 2022 $ 1,138 $ 381,788 $ 534,450 $ ( 3,159 ) $ ( 408,481 ) $ — $ 505,736

Stock Additional

Capital Retained

Net earnings 32,005 34 32,039

Other comprehensive loss ( 618 ) ( 618 )

Adjustment to treasury stock for holdings in investment partnerships ( 638 ) ( 638 )

Transactions with noncontrolling interests 8,889 8,889

Balance at September 30, 2022 $ 1,138 $ 381,788 $ 566,455 $ ( 3,777 ) $ ( 409,119 ) $ 8,923 $ 545,408

Biglari Holdings Inc.

Shareholders’ Equity

Stock Additional Paid-In Capital Retained

Earnings Accumulated

1 unchanged sentence

Income (Loss) Treasury

Stock Non-controlling interests Total

Balance at December 31, 2020 $ 1,138 $ 381,788 $ 573,050 $ ( 1,531 ) $ ( 389,617 ) $ — $ 564,828

Net earnings (loss) 71,707 71,707

Net earnings 71,707 71,707

Other comprehensive loss ( 444 ) ( 444 )

5 unchanged sentences

Balance at June 30, 2021 $ 1,138 $ 381,788 $ 624,020 $ ( 1,860 ) $ ( 391,594 ) $ — $ 613,492

Net earnings (loss) ( 10,669 ) ( 10,669 )

Other comprehensive loss ( 49 ) ( 49 )

Adjustment to treasury stock for holdings in investment partnerships ( 4,208 ) ( 4,208 )

Balance at September 30, 2021 $ 1,138 $ 381,788 $ 613,351 $ ( 1,909 ) $ ( 395,802 ) $ — $ 598,566

See accompanying Notes to Consolidated Financial Statements.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022

September 30, 2022

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

13 unchanged sentences

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

As of June 30, 2022, Mr.

As of September 30, 2022, Mr.

Biglari beneficially owns shares of the Company that represent approximately 66.3 % of the economic interest and approximately 70.4 % of the voting interest.

Business Acquisition

On September 14, 2022, the Company completed the purchase of 685,505 shares of Series A Preferred Stock (the "Preferred Shares") of Abraxas Petroleum Corporation ("Abraxas Petroleum") for a purchase price of $ 80,000 .

On October 26, 2022, the Company converted the preferred stock to 90 % of the outstanding common stock of Abraxas Petroleum.

We have concluded that Abraxas Petroleum is a consolidated entity and have recorded noncontrolling interests attributable to the interest held by other shareholders.

The Company used working capital including its line of credit to fund the purchase of the Preferred Shares.

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

The Company’s financial results include the results of Abraxas Petroleum from the acquisition date to the end of the third quarter.

The revenues and operating results for Abraxas Petroleum were not significant to the Company for the third quarter.

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, and Southern Oil Company.

The consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries, including Steak n Shake Inc., Western Sizzlin Corporation, First Guard Insurance Company, Maxim Inc., Southern Pioneer Property & Casualty Insurance Company, Southern Oil Company and Abraxas Petroleum.

Intercompany accounts and transactions have been eliminated in consolidation.

7 unchanged sentences

transferred 83,465 shares of Biglari Holdings’ Class A common stock and 890,272 shares of Biglari Holdings’ Class B common stock to The Lion Fund, L.P.

The following table presents shares authorized, issued and outstanding on June 30, 2022 and December 31, 2021.

June 30, 2022 December 31, 2021

Earnings Per Share (continued)

The following table presents shares authorized, issued and outstanding on September 30, 2022 and December 31, 2021.

September 30, 2022 December 31, 2021

Class A Class B Class A Class B

1 unchanged sentence

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

Earnings Per Share (continued)

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

2 unchanged sentences

There are no dilutive securities outstanding.

Second Quarter First Six Months

Third Quarter First Nine Months

2022 2021 2022 2021

2 unchanged sentences

Equivalent Class A common stock for earnings per share 293,275 316,236 299,881 320,377

Investments net of deferred taxes is presented below.

2022 December 31,

Investments $ 71,771 $ 83,061

Deferred tax liability related to investments ( 85 ) ( 845 )

Investments net of deferred taxes $ 71,686 $ 82,216

We classify investments in fixed maturity securities at the acquisition date as either available-for-sale or held-to-maturity and re-evaluate the classification at each balance sheet date.

4 unchanged sentences

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

Investment losses for the second quarter and first six months of 2022 were $ 3,560 and $ 3,335 , respectively.

Investment losses in the second quarter of 2021 were $ 1,150 and investment gains in the first six months of 2021 were $ 1,931 .

Investment losses for the third quarter and first nine months of 2022 were $ 849 and $ 4,184 , respectively.

Investment gains in the third quarter and first nine months of 2021 were $ 4,534 and $ 6,465 , respectively.

Investment Partnerships

13 unchanged sentences

Investment partnership gains (losses) ( 119,864 ) ( 37,620 ) ( 82,244 )

Contributions (net of distributions) 19,886 19,886

Distributions (net of contributions) ( 16,023 ) ( 16,023 )

Changes in proportionate share of Company stock held 7,268 ( 7,268 )

Partnership interest at June 30, 2022 $ 349,339 $ 197,586 $ 151,753

Partnership interest at September 30, 2022 $ 338,314 $ 193,450 $ 144,864

Fair Value Company

4 unchanged sentences

Changes in proportionate share of Company stock held 6,185 ( 6,185 )

Partnership interest at June 30, 2021 $ 551,942 $ 240,064 $ 311,878

Partnership interest at September 30, 2021 $ 533,996 $ 260,907 $ 273,089

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

September 30,

2022 December 31, 2021

2 unchanged sentences

Carrying value of investment partnerships net of deferred taxes $ 122,688 $ 205,867

The Company’s proportionate share of Company stock held by investment partnerships at cost was $ 408,481 and $ 401,851 at June 30, 2022 and December 31, 2021, respectively, and was recorded as treasury stock.

The Company’s proportionate share of Company stock held by investment partnerships at cost was $ 409,119 and $ 401,851 at September 30, 2022 and December 31, 2021, respectively, and was recorded as treasury stock.

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

2 unchanged sentences

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

Second Quarter First Six Months

Third Quarter First Nine Months

2022 2021 2022 2021

8 unchanged sentences

There were no incentive reallocations from Biglari Holdings to Biglari Capital Corp.

during the first six months of 2022 and 2021.

during the first nine months of 2022 and 2021.

Investment Partnerships (continued)

4 unchanged sentences

Lion Fund Lion Fund II

Total assets as of June 30, 2022 $ 251,812 $ 221,118

Total liabilities as of June 30, 2022 $ 13,235 $ 67,093

Revenue for the first six months of 2022 $ ( 43,115 ) $ ( 119,441 )

Earnings for the first six months of 2022 $ ( 43,237 ) $ ( 120,132 )

Biglari Holdings’ ownership interest as of June 30, 2022 87.9 % 88.9 %

Total assets as of September 30, 2022 $ 247,357 $ 307,446

Total liabilities as of September 30, 2022 $ 9,973 $ 162,520

Revenue for the first nine months of 2022 $ ( 46,341 ) $ ( 88,378 )

Earnings for the first nine months of 2022 $ ( 46,544 ) $ ( 89,771 )

Biglari Holdings’ ownership interest as of September 30, 2022 88.2 % 87.7 %

Total assets as of December 31, 2021 $ 114,749 $ 564,022

Total liabilities as of December 31, 2021 $ 7,763 $ 130,417

Revenue for the first six months of 2021 $ 31,297 $ 100,466

Earnings for the first six months of 2021 $ 31,260 $ 100,192

Biglari Holdings’ ownership interest as of June 30, 2021 61.3 % 94.0 %

Revenue for the first nine months of 2021 $ 35,639 $ 94,078

Earnings for the first nine months of 2021 $ 35,584 $ 93,548

Biglari Holdings’ ownership interest as of September 30, 2021 62.4 % 93.9 %

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

1 unchanged sentence

Property and equipment is composed of the following.

September 30,

2022 December 31,

8 unchanged sentences

Property and equipment, net $ 414,497 $ 349,351

Depletion expense related to oil and gas properties was $ 2,772 and $ 4,551 during the first six months of 2022 and 2021, respectively.

The Company recorded an impairment to restaurant long-lived assets of $ 559 in the first six months of 2021 related to underperforming stores.

Depletion expense related to oil and gas properties was $ 4,345 and $ 5,875 during the first nine months of 2022 and 2021, respectively.

The Company recorded an impairment to restaurant long-lived assets of $ 559 in the first nine months of 2021 related to underperforming stores.

The fair value of the long-lived assets was determined based on Level 3 inputs using a discounted cash flow model and quoted prices for the properties.

There were no impairments of property and equipment in 2022.

As of September 30, 2022, $ 5,002 of property and equipment is recorded as held for sale within other current assets.

Goodwill and Other Intangible Assets

2 unchanged sentences

Goodwill at December 31, 2021

Change in foreign exchange rates during the first six months of 2022 ( 48 )

Goodwill at June 30, 2022

Change in foreign exchange rates during the first nine months of 2022 ( 83 )

Goodwill at September 30, 2022

We evaluate goodwill and any indefinite-lived intangible assets for impairment annually, or more frequently if circumstances indicate impairment may have occurred.

6 unchanged sentences

Changes in such estimates or the application of alternative assumptions could produce significantly different results.

No impairment was recorded in the first six months of 2022 or 2021.

No impairment was recorded in the first nine months of 2022 or 2021.

Western Sizzlin has experienced a decline in its franchised units for several years.

6 unchanged sentences

Impairment to lease rights — ( 20 ) ( 20 )

Change in foreign exchange rates during the first six months of 2022 — ( 563 ) ( 563 )

Balance at June 30, 2022

Change in foreign exchange rates during the first nine months of 2022 — ( 974 ) ( 974 )

Balance at September 30, 2022

$ 15,876 $ 6,593 $ 22,469

3 unchanged sentences

Restaurant operations revenues were as follows.

Second Quarter First Six Months

Third Quarter First Nine Months

2022 2021 2022 2021

16 unchanged sentences

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

During the second quarter of 2022 and 2021, restaurant operations recognized $ 5,057 and $ 3,734 , respectively, in franchise partner fees related to rental income.

During the first six months ended June 30, 2022 and June 30, 2021, restaurant operations recognized $ 9,831 and $ 6,634 , respectively, in franchise partner fees related to rental income.

During the third quarter of 2022 and 2021, restaurant operations recognized $ 5,362 and $ 4,277 , respectively, in franchise partner fees related to rental income.

During the first nine months ended September 30, 2022 and September 30, 2021, restaurant operations recognized $ 15,193 and $ 10,910 , respectively, in franchise partner fees related to rental income.

Franchise Royalties and Fees

10 unchanged sentences

Accounts payable and accrued expenses include the following.

September 30,

2022 December 31,

6 unchanged sentences

Professional fees 1,998 11,731

Oil and gas payable 5,586 1,936

Other 4,359 464

Accounts payable and accrued expenses $ 101,503 $ 100,467

Notes Payable

Line of Credit and Note Payable

Bigari Holdings Line of Credit

On September 13, 2022, Biglari Holdings entered into a line of credit in an aggregate principal amount of up to $ 30,000 .

The line of credit will be available on a revolving basis until September 12, 2024.

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

The balance of the line of credit on September 30, 2022 was $ 30,000 .

Steak n Shake Credit Facility

4 unchanged sentences

Lease obligations include the following.

Current portion of lease obligations June 30,

Current portion of lease obligations September 30,

2022 December 31,

15 unchanged sentences

Total lease cost consists of the following.

Second Quarter First Six Months

Third Quarter First Nine Months

2022 2021 2022 2021

6 unchanged sentences

Supplemental cash flow information related to leases is as follows.

First Six Months

First Nine Months

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

4 unchanged sentences

Supplemental balance sheet information related to leases is as follows.

September 30,

2022 December 31,

2 unchanged sentences

Weighted-average lease terms and discount rates are as follows.

September 30,

Weighted-average remaining lease terms:

4 unchanged sentences

Operating leases 7.0 %

Maturities of lease liabilities as of June 30, 2022 are as follows.

Maturities of lease liabilities as of September 30, 2022 are as follows.

Year Operating

10 unchanged sentences

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

Second Quarter First Six Months

Third Quarter First Nine Months

2022 2021 2022 2021

3 unchanged sentences

Lease Assets and Obligations (continued)

The following table displays the Company’s future minimum rental receipts for non-cancelable leases and subleases as of June 30, 2022.

The following table displays the Company’s future minimum rental receipts for non-cancelable leases and subleases as of September 30, 2022.

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

5 unchanged sentences

Accumulated Other Comprehensive Income

Accumulated other comprehensive income decreased $ 1,021 and increased $ 115 during the second quarters of 2022 and 2021, respectively.

During the first six months of 2022, accumulated other comprehensive income decreased by $ 1,252 and decreased by $ 329 in the first six months of 2021.

There were no reclassifications from accumulated other comprehensive loss to earnings during the first six months of 2022 and 2021.

Accumulated other comprehensive income decreased by $ 618 and $ 49 during the third quarters of 2022 and 2021, respectively.

During the first nine months of 2022, accumulated other comprehensive income decreased by $ 1,870 and $ 378 in the first nine months of 2021.

There were no reclassifications from accumulated other comprehensive loss to earnings during the first nine months of 2022 and 2021.

All changes in accumulated other comprehensive loss were due to foreign currency translation adjustments.

In determining the quarterly provision for income taxes, the Company used an estimated annual effective tax rate for the first six months of 2022 and a discrete effective tax rate method based on statutory tax rates for the first six months of 2021.

In determining the quarterly provision for income taxes, the Company used an estimated annual effective tax rate for the first nine months of 2022 and a discrete effective tax rate method based on statutory tax rates for the first nine months of 2021.

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

Income tax benefit for the second quarter of 2022 was $ 22,709 compared to an income tax benefit of $ 6,198 for the second quarter of 2021.

Income tax benefit for the first six months of 2022 was $ 22,880 compared to an income tax expense of $ 15,818 for the first six months of 2021.

Income tax expense for the third quarter of 2022 was $ 9,598 compared to an income tax benefit of $ 4,274 for the third quarter of 2021.

Income tax benefit for the first nine months of 2022 was $ 13,282 compared to an income tax expense of $ 11,544 for the first nine months of 2021.

The variance in income taxes between 2022 and 2021 is attributable to taxes on income generated by the investment partnerships.

Investment partnership pre-tax losses were $ 111,902 during the first six months of 2022 compared to pre-tax gains of $ 47,575 during the first six months of 2021.

Investment partnership pre-tax gains were $ 29,658 during the third quarter of 2022 compared to pre-tax losses of $ 20,231 during the third quarter of 2021.

Investment partnership pre-tax losses were $ 82,244 during the first nine months of 2022 compared to pre-tax gains of $ 27,344 during the first nine months of 2021.

Commitments and Contingencies

30 unchanged sentences

Fair Value of Financial Assets (continued)

As of June 30, 2022 and December 31, 2021, the fair values of financial assets were as follows.

June 30, 2022 December 31, 2021

As of September 30, 2022 and December 31, 2021, the fair values of financial assets were as follows.

September 30, 2022 December 31, 2021

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

15 unchanged sentences

The Biglari Entities are owned by Mr.

The service agreement has a five-year term, effective on October 1, 2017.

The Company paid Biglari Enterprises $ 4,200 in service fees during the first six months of 2022 and 2021.

The Company paid Biglari Enterprises $ 6,300 in service fees during the first nine months of 2022 and 2021.

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

11 unchanged sentences

Our insurance operations include First Guard and Southern Pioneer.

The Company also reports segment information for Maxim and Southern Oil.

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 in corporate.

3 unchanged sentences

The tabular information that follows shows data of our reportable segments reconciled to amounts reflected in the consolidated financial statements.

A disaggregation of our consolidated data for the second quarters and first six months of 2022 and 2021 is presented in the tables which follow.

Second Quarter First Six Months

A disaggregation of our consolidated data for the third quarters and first nine months of 2022 and 2021 is presented in the tables which follow.

Third Quarter First Nine Months

2022 2021 2022 2021

9 unchanged sentences

Total Insurance Operations 16,312 14,723 47,745 43,729

Oil and Gas Operations:

Southern Oil 12,688 7,353 36,940 24,310

Abraxas Petroleum 1,692 — 1,692 —

Total Oil and Gas Operations 14,380 7,353 38,632 24,310

Maxim 1,905 863 3,788 2,695

2 unchanged sentences

Earnings (Losses) Before Income Taxes

Second Quarter First Six Months

Third Quarter First Nine Months

2022 2021 2022 2021

10 unchanged sentences

Total Insurance Operations 3,092 3,842 6,887 11,398

Oil and Gas Operations:

Southern Oil 6,795 2,982 19,137 9,047

Abraxas Petroleum 446 — 446 —

Total Oil and Gas Operations 7,241 2,982 19,583 9,047

Maxim 1,534 ( 56 ) 1,699 867

14 unchanged sentences

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

As of June 30, 2022, Mr.

As of September 30, 2022, Mr.

Biglari beneficially owns shares of the Company that represent approximately 66.3% of the economic interest and 70.4% of the voting interest.

On October 26, 2022, the Company converted the preferred stock to 90% of the outstanding common stock of Abraxas Petroleum.

We have concluded that Abraxas Petroleum is a consolidated entity and have recorded noncontrolling interests attributable to the interest held by other shareholders.

The Company used working capital including its line of credit to fund the purchase of the Preferred Shares.

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

The Company’s financial results include the results of Abraxas Petroleum from the acquisition date to the end of the third quarter.

The revenues and operating results for Abraxas Petroleum were not significant to the Company for the third quarter.

Net earnings (loss) attributable to Biglari Holdings shareholders are disaggregated in the table that follows.

Amounts are recorded after deducting income taxes.

Second Quarter First Six Months

Third Quarter First Nine Months

2022 2021 2022 2021

10 unchanged sentences

32,039 (10,669) (42,039) 40,301

Our restaurant businesses, which include Steak n Shake and Western Sizzlin, comprise 560 company-operated and franchise restaurants as of June 30, 2022.

Earnings attributable to noncontrolling interest 34 — 34 —

$ 32,005 $ (10,669) $ (42,073) $ 40,301

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

Our restaurant businesses, which include Steak n Shake and Western Sizzlin, comprise 552 company-operated and franchise restaurants as of September 30, 2022.

Steak n Shake Western Sizzlin

7 unchanged sentences

Net restaurants opened (closed) (6) — (19) — — (25)

Total stores as of June 30, 2022

Total stores as of September 30, 2022

181 171 159 3 38 552

3 unchanged sentences

Net restaurants opened (closed) (1) — (15) — (1) (17)

Total stores as of June 30, 2021

Total stores as of September 30, 2021

221 140 179 3 38 581

As of June 30, 2022, 41 of the 176 company-operated Steak n Shake stores were closed.

As of September 30, 2022, 39 of the 181 company-operated Steak n Shake stores were closed.

We plan to refranchise a majority of our closed company-operated restaurants.

1 unchanged sentence

Restaurant operations are summarized below.

Second Quarter First Six Months

Third Quarter First Nine Months

2022 2021 2022 2021

26 unchanged sentences

The majority of Steak n Shake’s dining rooms were reopened during 2021, and in doing so a self-service model has been implemented.

Net sales for the second quarter and first six months of 2022 were $37,681 and $75,897, respectively, representing a decrease of $11,722 or 23.7% and $28,456 or 27.3%, compared to the second quarter and first six months of 2021, respectively.

Net sales for the third quarter and first nine months of 2022 were $37,448 and $113,345, respectively, representing a decrease of $4,468 or 10.7% and $32,924 or 22.5%, compared to the third quarter and first nine months of 2021, respectively.

The decrease in revenue of company-owned restaurants is primarily due to the shift of company units to franchise partner units.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements