What changed in this filing

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Item 1. Business

2023-02-27 compared with 2022-02-28 · 22 added, 27 removed, 105 unchanged (32% of the section changed)

3 unchanged sentences

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 finance decision-making.

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.

2 unchanged sentences

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

Overview of the Impact of COVID-19

The novel coronavirus (“COVID-19”), declared a pandemic by the World Health Organization in March 2020, caused governments to impose restrictive measures to contain its spread.

Those shutdowns significantly affected our operating businesses to varying degrees.

The risks and uncertainties resulting from the pandemic may continue to affect our future earnings, cash flows, and financial condition.

Accordingly, estimates used in the preparation of our financial statements, including those associated with the evaluation of certain long-lived assets, goodwill, and other intangible assets for impairment, may be subject to significant adjustments in future periods.

Restaurant Operations

11 unchanged sentences

Western Sizzlin is headquartered in Roanoke, Virginia.

The novel coronavirus (“COVID-19”), declared a pandemic by the World Health Organization in March 2020, caused governments to impose restrictive measures to contain its spread.

In response to COVID-19, our restaurants were required to close their dining rooms in the first quarter of 2020, and the majority of those dining rooms remained closed during 2020.

8 unchanged sentences

Steak n Shake offers a franchise partner program to transition company-operated restaurants to franchise partnerships.

The franchise agreement stipulates that the franchisee make an upfront investment totaling $10,000.

The franchise agreement stipulates that the franchisee make an upfront investment totaling ten thousand dollars.

Steak n Shake, as the franchisor, assesses a fee of up to 15% of sales as well as 50% of profits.

1 unchanged sentence

Each must meet the gold standard in service.

Franchise partners are required to be hands-on operators, limited to a single location.

Franchise partners are single-unit owner-operators.

Traditional Franchise Restaurants

Restaurant operations’ traditional franchising program extends the brands to areas in which there are no current development plans for company stores.

The expansion plans include seeking qualified new franchisees and expanding relationships with

current franchisees.

The expansion plans include seeking qualified new franchisees and expanding relationships with current franchisees.

Restaurant operations typically seek franchisees with both the financial resources necessary to fund successful development and significant experience in the restaurant/retail business.

4 unchanged sentences

We have a corporate office in Monaco and an international organization with personnel in various functions to support our international business.

As of December 31, 2021, we operated four company locations in Europe to promote the Steak n Shake brand to prospective franchisees.

Similar to our traditional domestic franchise agreements, a typical international franchise development agreement includes development and franchise fees in addition to subsequent royalty fees based on the gross sales of each restaurant.

As of December 31, 2021, there were a total of 35 franchise units in Europe.

The restaurant business is one of the most intensely competitive industries.

3 unchanged sentences

The performance of individual restaurants may be impacted by factors such as traffic patterns, demographic trends, weather conditions, and competing restaurants.

Because of government actions to contain the spread of COVID-19, our restaurants were required to close their dining rooms during the first quarter of 2020.

Many of our competitors reopened their dining rooms in 2020, whereas the majority of our dining rooms reopened by December 31, 2021.

Government Regulations

12 unchanged sentences

First Guard and Southern Pioneer operate under licenses issued by various state insurance authorities.

The primary focus of regulation is to assure that insurers are financially solvent and that policyholder interests are otherwise protected.

The primary focus of regulation is to ensure that insurers are financially solvent and that policyholder interests are otherwise protected.

States establish minimum capital levels for insurance companies and establish guidelines for permissible business and investment activities.

12 unchanged sentences

First Guard uses its own claim staff to manage claims.

variations in First Guard’s insurance business are not significant.

Seasonal variations in First Guard’s insurance business are not significant.

However, extraordinary weather conditions or other factors may have a significant effect upon the frequency or severity of claims.

6 unchanged sentences

Oil and Gas Business

Southern Oil Company ("Southern Oil") primarily operates oil and natural gas properties offshore in the shallow waters of the Gulf of Mexico.

Southern Oil is headquartered in Madisonville, Louisiana.

The Company's oil and gas operations are conducted through two entities, Southern Oil Company (“Southern Oil”) and Abraxas Petroleum Corporation (“Abraxas Petroleum”).

Southern Oil primarily operates oil and natural gas properties offshore in the shallow waters of the Gulf of Mexico.

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

On September 14, 2022, the Company purchased Series A Preferred Stock (the “Preferred Shares”) of Abraxas Petroleum for a purchase price of $80 million.

On October 26, 2022, the Company exchanged the Preferred Shares for 90% of the outstanding common stock of Abraxas Petroleum.

The oil and gas industry is fundamentally a commodity business.

Southern Oil’s operations and earnings, therefore, may be significantly affected by changes in oil and natural gas prices.

Southern Oil’s and Abraxas Petroleum’s operations and earnings, therefore, may be significantly affected by changes in oil and natural gas prices.

The COVID-19 pandemic caused oil demand to decrease significantly during the second and third quarters of 2020, which created oversupplied markets and lower commodity prices and margins.

In response, the Company cut production and expenses in its oil and natural gas business during 2020.

However, the significant increase in average crude oil and natural gas prices in 2021 compared to 2020 resulting from the lifting of COVID-19 restrictions, the resumption of normal economic activity, and the resulting improvement in supply and demand fundamentals caused Southern Oil to return to full production during 2021.

Southern Oil competes with fully integrated, major global petroleum companies, as well as independent and national petroleum companies.

In addition, the Company is subject to a variety of risks inherent in the oil and gas business, including a wide range of local, state, and federal regulations.

However, the significant increase in average crude oil and natural gas prices in 2021 and 2022 as compared to 2020 resulting from the lifting of COVID-19 restrictions, the resumption of normal economic activity, and the resulting improvement in supply and demand fundamentals caused Southern Oil to return to full production during 2021 and 2022.

Biglari Holdings’ oil and gas operations compete with fully integrated, major global petroleum companies, as well as independent and national petroleum companies.

In addition, our companies are subject to a variety of risks inherent in the oil and gas business, including a wide range of local, state, and federal regulations.

Southern Oil is headquartered in Madisonville, Louisiana, and Abraxas Petroleum is headquartered in San Antonio, Texas.

Brand Licensing Business

Maxim’s business lies principally in brand licensing.

Maxim is headquartered in New York City, New York.

Maxim is headquartered in New York, New York.

Maxim competes for licensing business with other companies.

2 unchanged sentences

Maxim products are marketed under various registered brand names, including, but not limited to, “MAXIM®” and “Maxim®.”

The Company and its subsidiaries have invested in The Lion Fund, L.P.

and The Lion Fund II, L.P.

The Company and its subsidiaries have invested in The Lion Fund, L.P., and The Lion Fund II, L.P.

(collectively, “the investment partnerships”).

8 unchanged sentences

Information related to our reportable segments may be found in Part II, Item 8 of this Form 10-K.

Biglari Holdings maintains a website ( www.biglariholdings.com ) where its annual reports, press releases, interim shareholder reports, and links to its subsidiaries’ websites can be found.

Biglari Holdings maintains a website ( biglariholdings.com ) where its annual reports, press releases, interim shareholder reports, and links to its subsidiaries’ websites can be found.

Biglari Holdings’ periodic reports filed with the Securities and Exchange Commission (the “SEC”), which include Form 10-K, Form 10-Q, Form 8-K, and amendments thereto, may be accessed by the public free of charge from the SEC and through Biglari Holdings’ website.

In addition, corporate governance documents such as Corporate Governance Guidelines, Code of Conduct, Compensation Committee Charter, and Audit Committee Charter are posted on the Company’s website and are available without charge upon written request.

The documents are also available without charge upon written request.

The Company’s website and the information contained therein or connected thereto are not intended to be incorporated into this report on Form 10-K.

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-K

Item 1. Business