What changed in this filing

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Item 1. Financial Statements

2023-08-04 compared with 2023-05-05 · 430 added, 115 removed, 447 unchanged (55% of the section changed)

20 unchanged sentences

Accounts payable and accrued expenses $ 73,376 $ 78,616

Unpaid losses and loss adjustment expenses 15,514 16,805

Loss and loss adjustment expenses 14,680 16,805

Unearned premiums 14,320 12,495

22 unchanged sentences

(dollars in thousands except per share amounts)

First Quarter

Second Quarter First Six Months

2023 2022 2023 2022

(Unaudited) (Unaudited)

Restaurant operations $ 64,491 $ 60,324 $ 125,620 $ 120,171

14 unchanged sentences

Total costs and expenses 83,503 80,055 164,630 159,460

Investment gains 3,638 225

Investment gains (losses) 353 ( 3,560 ) 3,991 ( 3,335 )

Investment partnership gains (losses) ( 7,496 ) ( 105,241 ) 65,092 ( 111,902 )

7 unchanged sentences

Net earnings (loss) per average equivalent Class A share * $ 6.64 $ ( 244.37 ) $ 229.00 $ ( 244.29 )

* Net earnings (loss) per average equivalent Class B share outstanding are one-fifth of the average equivalent Class A share or $ 44.46 for the first quarter of 2023 and $( 0.20 ) for the first quarter of 2022.

*Net earnings (loss) per average equivalent Class B share outstanding are one-fifth of the average equivalent Class A share or $ 1.33 and $ 45.80 for the second quarter and first six months of 2023, respectively, and $( 48.87 ) and $( 48.86 ) for the second quarter and first six months of 2022, respectively.

See accompanying Notes to Consolidated Financial Statements.

2 unchanged sentences

(dollars in thousands)

First Quarter

Second Quarter First Six Months

2023 2022 2023 2022

(Unaudited) (Unaudited)

Net earnings (loss) $ 1,876 $ ( 73,780 ) $ 67,413 $ ( 74,078 )

1 unchanged sentence

Comprehensive income (loss) 1,554 ( 74,801 ) 67,423 ( 75,330 )

Comprehensive income attributable to noncontrolling interest 651 —

Comprehensive income (loss) attributable to noncontrolling interests ( 60 ) — 591 —

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

shareholders $ 1,614 $ ( 74,801 ) $ 66,832 $ ( 75,330 )

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(dollars in thousands)

Biglari Holdings Inc.

Shareholders’ Equity

Stock Additional Paid-In

Capital Retained

Earnings Accumulated

Comprehensive

Income (Loss) Treasury

Stock Non-controlling Interests Total

For the first quarter of 2023

Balance at December 31, 2022 $ 1,138 $ 381,788 $ 576,510 $ ( 2,790 ) $ ( 409,680 ) $ 8,602 $ 555,568

Net earnings (loss) 64,886 651 65,537

Other comprehensive income 332 332

Adjustment for holdings in investment partnerships ( 239 ) ( 239 )

Balance at March 31, 2023 $ 1,138 $ 381,788 $ 641,396 $ ( 2,458 ) $ ( 409,919 ) $ 9,253 $ 621,198

For the first quarter of 2022

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

Net earnings (loss) ( 298 ) ( 298 )

Other comprehensive loss ( 231 ) ( 231 )

Adjustment for holdings in investment partnerships 130 130

Balance at March 31, 2022 $ 1,138 $ 381,788 $ 608,230 $ ( 2,138 ) $ ( 401,721 ) $ — $ 587,297

See accompanying Notes to Consolidated Financial Statements.

2 unchanged sentences

(dollars in thousands)

First Quarter

First Six Months

Operating activities

5 unchanged sentences

Gains on sale of assets ( 4,194 ) ( 165 )

Investment and investment partnerships (gains) losses ( 76,226 ) 6,436

Investment and investment partnership (gains) losses ( 69,083 ) 115,237

Distributions from investment partnerships — 4,500

5 unchanged sentences

Proceeds from property and equipment disposals 9,670 109

Purchases of noncontrolling interests ( 5,387 ) —

Purchases of interests in limited partnerships ( 9,100 ) ( 19,386 )

3 unchanged sentences

Financing activities

Repayments of borrowings ( 3,500 ) —

Proceeds from line of credit 5,000 —

Payments on line of credit ( 11,400 ) —

Principal payments on direct financing lease obligations ( 3,078 ) ( 3,134 )

Net cash used in financing activities ( 9,478 ) ( 3,134 )

Effects of foreign currency exchange rate changes 8 ( 23 )

Increase in cash, cash equivalents and restricted cash 2,146 3,428

Effect of exchange rate changes on cash 98 ( 88 )

Decrease in cash, cash equivalents and restricted cash ( 6,336 ) ( 1,837 )

Cash, cash equivalents and restricted cash at beginning of year 38,805 43,687

Cash, cash equivalents and restricted cash at end of first quarter $ 40,951 $ 47,115

First Quarter

Cash, cash equivalents and restricted cash at end of second quarter $ 32,469 $ 41,850

Cash and cash equivalents $ 30,881 $ 40,512

Restricted cash in other long-term assets 1,588 1,338

Cash, cash equivalents and restricted cash at end of first quarter $ 40,951 $ 47,115

Cash, cash equivalents and restricted cash at end of second quarter $ 32,469 $ 41,850

See accompanying Notes to Consolidated Financial Statements.

BIGLARI HOLDINGS INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(dollars in thousands)

Biglari Holdings Inc.

Shareholders’ Equity

Stock Additional Paid-In

Capital Retained

Earnings Accumulated Other Comprehensive Income (Loss) Treasury

Stock Non-controlling Interests Total

For the second quarter and first six months of 2023

Balance at December 31, 2022 $ 1,138 $ 381,788 $ 576,510 $ ( 2,790 ) $ ( 409,680 ) $ 8,602 $ 555,568

Net earnings (loss) 64,886 651 65,537

Other comprehensive income 332 332

Adjustment for holdings in investment partnerships ( 239 ) ( 239 )

Balance at March 31, 2023 $ 1,138 $ 381,788 $ 641,396 $ ( 2,458 ) $ ( 409,919 ) $ 9,253 $ 621,198

Net earnings (loss) 1,936 ( 60 ) 1,876

Other comprehensive loss ( 322 ) ( 322 )

Adjustment for holdings in investment partnerships ( 1,011 ) ( 1,011 )

Purchases of noncontrolling interests 3,806 ( 9,193 ) ( 5,387 )

Balance at June 30, 2023 $ 1,138 $ 385,594 $ 643,332 $ ( 2,780 ) $ ( 410,930 ) $ — $ 616,354

For the second quarter and first six months of 2022

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

Net earnings (loss) ( 298 ) ( 298 )

Other comprehensive loss ( 231 ) ( 231 )

Adjustment for holdings in investment partnerships 130 130

Balance at March 31, 2022 $ 1,138 $ 381,788 $ 608,230 $ ( 2,138 ) $ ( 401,721 ) $ — $ 587,297

Net earnings (loss) ( 73,780 ) ( 73,780 )

Other comprehensive loss ( 1,021 ) ( 1,021 )

Adjustment for holdings in investment partnerships ( 6,760 ) ( 6,760 )

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

See accompanying Notes to Consolidated Financial Statements.

BIGLARI HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

June 30, 2023

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

14 unchanged sentences

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

As of March 31, 2023, Mr.

As of June 30, 2023, 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 purchased Series A Preferred Stock (the “Preferred Shares”) of Abraxas Petroleum Corporation 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.

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

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

On June 14, 2023, Biglari Holdings purchased the remaining 10 % of the outstanding common stock of Abraxas Petroleum.

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, Southern Oil Company, and Abraxas Petroleum Corporation.

Intercompany accounts and transactions have been eliminated in consolidation.

3 unchanged sentences

However, these shares are legally outstanding.

The following table presents shares authorized, issued and outstanding on March 31, 2023 and December 31, 2022.

March 31, 2023 December 31, 2022

Earnings Per Share (continued)

The following table presents shares authorized, issued and outstanding on June 30, 2023 and December 31, 2022.

June 30, 2023 December 31, 2022

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 ”.

1 unchanged sentence

In the tabulation below is the weighted average equivalent Class A common stock for earnings per share.

March 31, 2023 March 31, 2022

Second Quarter First Six Months

2023 2022 2023 2022

Equivalent Class A common stock outstanding 620,592 620,592 620,592 620,592

6 unchanged sentences

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

Investment gains for the first quarter of 2023 and 2022 were $ 3,638 and $ 225 , respectively.

Investment gains for the second quarter and first six months of 2023 were $ 353 and $ 3,991 , respectively.

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

Investment Partnerships

9 unchanged sentences

is solely owned by Mr.

Investment Partnerships (continued)

The fair value and adjustment for Company common stock held by the investment partnerships to determine the carrying value of our partnership interest are presented below.

3 unchanged sentences

Investment partnership gains (losses) 157,768 92,676 65,092

Contributions 2,700 2,700

Contributions (net of distributions) 9,100 9,100

Changes in proportionate share of Company stock held 1,250 ( 1,250 )

Partnership interest at March 31, 2023 $ 507,499 $ 276,656 $ 230,843

Partnership interest at June 30, 2023 $ 549,872 $ 321,136 $ 228,736

Fair Value Company

2 unchanged sentences

Investment partnership gains (losses) ( 144,748 ) ( 32,846 ) ( 111,902 )

Distributions (net of contributions) ( 1,500 ) ( 1,500 )

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

Changes in proportionate share of Company stock held 6,630 ( 6,630 )

Partnership interest at March 31, 2022 $ 471,792 $ 229,424 $ 242,368

Investment Partnerships (continued)

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

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

5 unchanged sentences

In effect, the tax-basis cost increased for the common stock of certain unaffiliated securities held by the investment partnerships.

The Company’s proportionate share of Company stock held by investment partnerships at cost was $ 409,919 and $ 409,680 as of March 31, 2023 and December 31, 2022, respectively.

The Company’s proportionate share of Company stock held by investment partnerships at cost was $ 410,930 and $ 409,680 at June 30, 2023 and December 31, 2022, respectively.

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.

First Quarter

Second Quarter First Six Months

2023 2022 2023 2022

Gains (losses) from investment partnerships $ ( 7,496 ) $ ( 105,241 ) $ 65,092 $ ( 111,902 )

Tax expense (benefit) ( 1,997 ) ( 24,894 ) 14,562 ( 26,754 )

Contribution to net earnings $ 56,029 $ ( 4,801 )

Contribution to net earnings (loss) $ ( 5,499 ) $ ( 80,347 ) $ 50,530 $ ( 85,148 )

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.

3 unchanged sentences

Gains and losses on the Company’s common stock and the related incentive reallocations are eliminated in our financial statements.

There were no incentive reallocations accrued during the first quarters of 2023 and 2022.

Investment Partnerships (continued)

Summarized financial information for The Lion Fund, L.P., and The Lion Fund II, L.P., is presented below.

There were no incentive reallocations accrued during the first six months of 2023 and 2022.

Summarized financial information for The Lion Fund, L.P.

and The Lion Fund II, L.P.

is presented below.

Equity in Investment Partnerships

Lion Fund Lion Fund II

Total assets as of March 31, 2023 $ 348,606 $ 415,057

Total liabilities as of March 31, 2023 $ 10,373 $ 173,731

Revenue for the first quarter of 2023 $ 63,558 $ 78,592

Earnings for the first quarter of 2023 $ 63,404 $ 76,341

Biglari Holdings’ ownership interest as of March 31, 2023 88.6 % 86.1 %

Total assets as of June 30, 2023 $ 423,880 $ 383,192

Total liabilities as of June 30, 2023 $ 19,939 $ 160,906

Revenue for the first six months of 2023 $ 117,282 $ 68,060

Earnings for the first six months of 2023 $ 116,952 $ 63,273

Biglari Holdings’ ownership interest as of June 30, 2023 88.8 % 86.0 %

Total assets as of December 31, 2022 $ 285,071 $ 330,832

Total liabilities as of December 31, 2022 $ 10,517 $ 167,847

Revenue for the first quarter of 2022 $ 969 $ ( 1,249 )

Earnings for the first quarter of 2022 $ 926 $ ( 1,581 )

Biglari Holdings’ ownership interest as of March 31, 2022 62.5 % 93.9 %

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 %

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

11 unchanged sentences

Property and equipment, net $ 388,777 $ 400,725

Depletion expense related to oil and gas properties was $ 2,648 and $ 1,380 during the first quarter of 2023 and 2022, respectively.

The Company recorded an impairment to restaurant long-lived assets of $ 776 in the first quarter of 2023 related to underperforming stores.

There were no impairments in the first quarter of 2022.

Property and equipment held for sale of $ 8,012 and $ 4,700 are recorded in other current assets as of March 31, 2023 and December 31, 2022, respectively.

The assets classified as held for sale include seven properties owned by Steak n Shake, which were previously operated restaurants, and Abraxas Petroleum’s office building.

During the first quarter of 2023, Steak n Shake sold the property of a former company-operated restaurant for a gain of $ 1,431 .

Depletion expense related to oil and gas properties was $ 5,386 and $ 2,772 during the first six months of 2023 and 2022, respectively.

The Company recorded an impairment to restaurant long-lived assets of $ 833 in the second quarter of 2023 and $ 1,609 in the first six months of 2023 related to underperforming stores.

There were no impairments of property and equipment in the second quarter and first six months of 2022.

Property and equipment held for sale of $ 1,671 and $ 4,700 are recorded in other assets as of June 30, 2023 and December 31, 2022, respectively.

The assets classified as held for sale at June 30, 2023 include five properties owned by Steak n Shake, which were previously company-operated restaurants.

During the first six months of 2023, Steak n Shake sold four properties for a gain of $ 4,414 .

Abraxas Petroleum sold its office building with no gain or loss recorded.

Goodwill and Other Intangible Assets

4 unchanged sentences

Accumulated impairment losses ( 300 )

Change in foreign exchange rates during the first quarter of 2023 9

Goodwill at March 31, 2023

Change in foreign exchange rates during the first six months of 2023 9

Goodwill at June 30, 2023

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.

The key assumptions and inputs used in such determinations may include forecasting revenue 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.

Due to the inherent subjectivity and uncertainty in forecasting future cash flows and earnings over long periods of time, actual results may differ materially for the forecasts.

If the carrying value of the indefinite-lived intangible asset exceeds fair value, the excess is charged to earnings as an impairment loss.

If the carrying value of a reporting unit exceeds the estimated fair value of the reporting unit, then the excess, limited to the carrying amount of goodwill, will be charged to earnings as an impairment loss.

There was no impairment recorded for goodwill during the first quarters of 2023 or 2022.

There was no impairment recorded for goodwill during the first six months of 2023 or 2022.

There was a $ 20 impairment recorded for intangible assets during the first six months of 2023 and $ 20 impairment recorded in the first six months of 2022.

Other Intangible Assets

5 unchanged sentences

15,876 7,161 23,037

Change in foreign exchange rates during the first quarter of 2023 — 113 113

Balance at March 31, 2023

Impairment — ( 20 ) ( 20 )

Change in foreign exchange rates during the first six months of 2023 — 117 117

Balance at June 30, 2023

$ 15,876 $ 7,258 $ 23,134

1 unchanged sentence

Restaurant operations revenues were as follows.

First Quarter

Second Quarter First Six Months

2023 2022 2023 2022

Net sales $ 39,524 $ 37,681 $ 76,418 $ 75,897

3 unchanged sentences

$ 64,491 $ 60,324 $ 125,620 $ 120,171

Restaurant Operations Revenues (continued)

Net sales are composed of retail sales of food through company-operated stores.

1 unchanged sentence

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.

Restaurant Operations Revenues (continued)

Franchise Partner Fees

6 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 first quarter of 2023 and 2022, restaurant operations recognized $ 5,575 and $ 4,774 , respectively, in franchise partner fees related to rental income.

During the second quarter of 2023 and 2022, restaurant operations recognized $ 5,763 and $ 5,057 , respectively, in franchise partner fees related to rental income.

During the first six months ended June 30, 2023 and June 30, 2022, restaurant operations recognized $ 11,338 and $ 9,831 , respectively, in franchise partner fees related to rental income.

Franchise Royalties and Fees

3 unchanged sentences

Other Revenue

Restaurant operations sells gift cards to customers which can be redeemed for retail food sales within our stores.

Restaurant operations sells gift cards to customers that 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.

8 unchanged sentences

Insurance accruals 4,223 6,012

Salaries and wages 6,602 4,400

Salaries, wages and vacation 7,020 4,400

Deferred revenue 4,323 4,445

3 unchanged sentences

Accounts payable and accrued expenses $ 73,376 $ 78,616

Line of Credit and Note Payable

Lines of Credit

Biglari Holdings Line of Credit

2 unchanged sentences

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

The balance of the line of credit was $ 6,500 and $ 10,000 on March 31, 2023 and December 31, 2022, respectively.

Our interest rate was 7.3 % on March 31, 2023.

The line of credit was paid in full in April 2023.

The balance of the line of credit on June 30, 2023 was $ 3,600 and $ 10,000 on December 31, 2022.

On June 30, 2023, the interest rate was 7.8 %.

Lines of Credit (continued)

Western Sizzlin Revolver

Western Sizzlin’s available line of credit is $ 500 .

As of March 31, 2023 and December 31, 2022, Western Sizzlin had no debt outstanding under its revolver.

As of June 30, 2023 and December 31, 2022, Western Sizzlin had no debt outstanding under its revolver.

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 three-month periods ending March 31, 2023 and 2022 follows.

A reconciliation of the changes in claim liabilities, net of reinsurance, for each of the six month periods ended June 30, 2023 and 2022 follows.

Balances at beginning of year:

10 unchanged sentences

Total 19,093 18,459

Balances at March 31:

Balances at June 30:

Net liabilities 14,680 13,474

1 unchanged sentence

Gross liabilities $ 15,830 $ 14,225

Incurred loss and loss adjustment expenses of $ 8,596 and $ 9,588 in the first quarter of 2023 and 2022, respectively, were recorded in earnings and related to insured events occurring in the current period and events occurring in all prior periods.

Incurred loss and loss adjustment expenses of $ 16,968 and $ 18,832 in the first six months of 2023 and 2022, respectively, were recorded in earnings and related to insured events occurring in the current period and events occurring in all prior periods.

Incurred and paid loss and loss adjustment expenses are net of reinsurance recoveries.

We recorded net reductions of estimated ultimate liabilities for prior accident years of $ 1,651 and $ 133 in the first quarter of 2023 and 2022, respectively, which produced corresponding reductions in incurred losses and loss adjustment expenses in those periods.

We recorded net reductions of estimated ultimate liabilities for prior accident years of $ 3,016 and $ 837 in the first six months of 2023 and 2022, respectively, which produced corresponding reductions in incurred losses and loss adjustment expenses in those periods.

These reductions as a percentage of the net liabilities at the beginning of each year were 17.9 % in 2023 and 6.4 % in 2022.

1 unchanged sentence

Lease obligations include the following.

Current portion of lease obligations March 31,

Current portion of lease obligations June 30,

2023 December 31,

8 unchanged sentences

Total long-term lease obligations $ 89,599 $ 91,844

Lease Assets and Obligations (continued)

Nature of Leases

5 unchanged sentences

Total lease cost consists of the following.

First Quarter

Second Quarter First Six Months

2023 2022 2023 2022

Finance lease costs:

5 unchanged sentences

Supplemental cash flow information related to leases is as follows.

First Quarter

First Six Months

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

2 unchanged sentences

Operating cash flows from operating leases $ 6,689 $ 6,266

Lease Assets and Obligations (continued)

Supplemental balance sheet information related to leases is as follows.

9 unchanged sentences

Operating leases 7.0 %

Lease Assets and Obligations (continued)

Maturities of lease liabilities as of March 31, 2023 are as follows.

Maturities of lease liabilities as of June 30, 2023 are as follows.

Year Operating

Leases Finance

Remainder of 2023 $ 9,210 $ 1,134

2023 $ 5,947 $ 756

2 unchanged sentences

2026 6,118 959

2027 3,820 623

After 2027 9,489 232

2 unchanged sentences

Total lease liabilities $ 37,183 $ 4,729

The components of lease income are as follows.

First Quarter

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

Second Quarter First Six Months

2023 2022 2023 2022

Operating lease income $ 4,044 $ 3,945 $ 8,129 $ 7,652

1 unchanged sentence

Total lease income $ 5,965 $ 5,371 $ 11,834 $ 10,408

The following table displays the Company’s future minimum rental receipts for non-cancelable leases and subleases as of March 31, 2023.

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, 2023.

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

1 unchanged sentence

Year Subleases Owned Properties

Remainder of 2023 $ 520 $ 119

2023 $ 348 $ 159

After 2027 125 3,014

Total future minimum receipts $ 1,758 $ 4,787

In determining the quarterly provision for income taxes, the Company used an estimated annual effective tax rate for the first quarter of 2023 and 2022.

In determining the quarterly provision for income taxes, the Company used an estimated annual effective tax rate for the first six months of 2023 and 2022.

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 first quarter of 2023 was $ 19,738 compared to an income tax benefit of $ 171 for the first quarter of 2022.

The variance in income taxes between 2023 and 2022 is primarily attributable to taxes on income generated by the investment partnerships.

Investment partnership pre-tax gains were $ 72,588 during the first quarter of 2023 compared to pre-tax losses of $ 6,661 during the first quarter of 2022.

Income tax expense for the second quarter of 2023 was $ 1,018 compared to an income tax benefit of $ 22,709 for the second quarter of 2022.

Income tax expense for the first six months of 2023 was $ 20,756 compared to an income tax benefit of $ 22,880 for the first six months of 2022.

The variance in income taxes between 2023 and 2022 is attributable to taxes on income generated by the investment partnerships.

Investment partnership pre-tax losses were $ 7,496 during the second quarter of 2023 compared to pre-tax losses of $ 105,241 during the second quarter of 2022.

Investment partnership pre-tax gains were $ 65,092 during the first six months of 2023 compared to pre-tax losses of $ 111,902 during the first six months of 2022.

Commitments and Contingencies

6 unchanged sentences

The use of alternative market assumptions and/or estimation methodologies may have a material effect on the estimated fair value.

Fair Value of Financial Assets (continued)

The hierarchy for measuring fair value consists of Levels 1 through 3, which are described below.

12 unchanged sentences

Equity securities:

The Company’s investments in equity securities are classified as Level 1 of the fair value hierarchy.

The Company’s investments in equity securities are classified as Levels 1 and 2 of the fair value hierarchy.

The Company’s investments in bonds consist of both corporate and government debt.

3 unchanged sentences

They represent mutual funds and publicly traded securities, each of which are classified as Level 1 of the fair value hierarchy.

Fair Value of Financial Assets (continued)

As of March 31, 2023 and December 31, 2022, the fair values of financial assets were as follows.

March 31, 2023 December 31, 2022

As of June 30, 2023 and December 31, 2022, the fair values of financial assets were as follows.

June 30, 2023 December 31, 2022

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

12 unchanged sentences

Biglari Enterprises is owned by Mr.

The Company paid Biglari Enterprises $ 2,100 in service fees during the first quarters of 2023 and 2022.

The Company paid Biglari Enterprises $ 4,200 in service fees during the first six months of 2023 and 2022.

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

17 unchanged sentences

Business Segment Reporting (continued)

A disaggregation of our consolidated data for the first quarters of 2023 and 2022 is presented in the tables which follow.

First Quarter

A disaggregation of our consolidated data for the second quarters and first six months of 2023 and 2022 is presented in the tables which follow.

Second Quarter First Six Months

2023 2022 2023 2022

Operating Businesses:

4 unchanged sentences

Insurance Operations:

Underwriting:

First Guard 9,215 9,015 18,114 17,746

10 unchanged sentences

Earnings (Losses) Before Income Taxes

First Quarter

Second Quarter First Six Months

2023 2022 2023 2022

Operating Businesses:

17 unchanged sentences

Corporate and other ( 6,216 ) ( 3,052 ) ( 9,809 ) ( 6,464 )

Investment gains (losses) 353 ( 3,560 ) 3,991 ( 3,335 )

Investment partnership gains (losses) ( 7,496 ) ( 105,241 ) 65,092 ( 111,902 )

$ 2,894 $ ( 96,489 ) $ 88,169 $ ( 96,958 )

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(dollars in thousands except per share data)

Biglari Holdings Inc.

is a holding company owning subsidiaries engaged in a number of diverse business activities, including property and casualty insurance, 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.

As of June 30, 2023, 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 September 14, 2022, the Company purchased Series A Preferred Stock (the “Preferred Shares”) of Abraxas Petroleum Corporation 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.

On June 14, 2023, Biglari Holdings purchased the remaining 10% of the outstanding common stock of Abraxas Petroleum.

Net earnings (loss) attributable to Biglari Holdings Inc.

shareholders are disaggregated in the table that follows.

Amounts are recorded after deducting income taxes.

Second Quarter First Six Months

2023 2022 2023 2022

Operating businesses:

Restaurant $ 6,935 $ 3,006 $ 12,775 $ 6,268

Insurance 3,132 1,859 5,301 2,903

Oil and gas 2,150 6,369 3,820 9,293

Brand licensing 156 375 247 124

Interest expense (31) — (160) —

Corporate and other (5,243) (2,237) (8,241) (4,888)

Total operating businesses 7,099 9,372 13,742 13,700

Investment gains 276 (2,805) 3,141 (2,630)

Investment partnership gains (losses) (5,499) (80,347) 50,530 (85,148)

Net earnings (loss) 1,876 (73,780) 67,413 (74,078)

Earnings (loss) attributable to noncontrolling interest (60) — 591 —

Net earnings (loss) attributable to Biglari Holdings Inc.

shareholders $ 1,936 $ (73,780) $ 66,822 $ (74,078)

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 521 company-operated and franchise restaurants as of June 30, 2023.

Steak n Shake Western Sizzlin

operated Franchise

Partner Traditional

Franchise Company-

operated Franchise Total

Total stores as of December 31, 2022

177 175 154 3 36 545

Corporate stores transitioned (2) 2 — — — —

Net restaurants opened (closed) (8) — (16) — — (24)

Total stores as of June 30, 2023

167 177 138 3 36 521

Total stores as of December 31, 2021

199 159 178 3 38 577

Corporate stores transitioned (18) 18 — — — —

Net restaurants opened (closed) (5) — (12) — — (17)

Total stores as of June 30, 2022

176 177 166 3 38 560

As of June 30, 2023, 30 of the 167 company-operated Steak n Shake stores were closed.

Steak n Shake has contracted to sell five of the 30 closed stores.

An additional fifteen closed stores are listed with brokers for lease or sale.

Steak n Shake plans to refranchise the remaining closed company-operated restaurants.

During the first six months of 2023, Steak n Shake reopened five stores and sold four properties;

all were closed as of December 31, 2022.

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

Restaurant operations are summarized below.

Second Quarter First Six Months

2023 2022 2023 2022

Net sales $ 39,524 $ 37,681 $ 76,418 $ 75,897

Franchise partner fees 19,070 16,425 36,982 32,049

Franchise royalties and fees 4,125 5,237 8,383 10,383

Other revenue 1,772 981 3,837 1,842

Total revenue 64,491 60,324 125,620 120,171

Restaurant cost of sales

Cost of food 11,702 29.6 % 11,365 30.2 % 22,150 29.0 % 22,325 29.4 %

Restaurant operating costs 19,295 48.8 % 20,350 54.0 % 37,752 49.4 % 40,382 53.2 %

Occupancy costs 3,931 9.9 % 4,240 11.3 % 7,764 10.2 % 8,600 11.3 %

Total cost of sales 34,928 35,955 67,666 71,307

Selling, general and administrative

General and administrative 10,790 16.7 % 10,121 16.8 % 21,253 16.9 % 18,771 15.6 %

Marketing 3,294 5.1 % 3,087 5.1 % 6,247 5.0 % 6,831 5.7 %

Other expenses (2,689) (4.2) % (361) (0.6) % (4,301) (3.4) % (316) (0.3) %

Total selling, general and administrative 11,395 17.7 % 12,847 21.3 % 23,199 18.5 % 25,286 21.0 %

Impairments (853) (20) (1,629) (20)

Depreciation and amortization (6,787) (6,106) (13,494) (12,320)

Interest on finance leases and obligations (1,301) (1,385) (2,608) (2,797)

Earnings before income taxes 9,227 4,011 17,024 8,441

Income tax expense 2,292 1,005 4,249 2,173

Contribution to net earnings $ 6,935 $ 3,006 $ 12,775 $ 6,268

Cost of food, restaurant operating costs, and occupancy costs are expressed as a percentage of net sales.

General and administrative, marketing and other expenses are expressed as a percentage of total revenue.

Net sales for the second quarter and first six months of 2023 were $39,524 and $76,418, respectively, representing an increase of $1,843 or 4.9% and $521 or 0.7%, compared to the second quarter and first six months of 2022, respectively.

The increase in revenue of company-owned restaurants is primarily due to higher same-store sales.

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 continue to decline as we transition from company-operated units to franchise partner units.

Our franchise partner fees were $19,070 during the second quarter of 2023, as compared to $16,425 during the second quarter of 2022.

Franchise partner fees were $36,982 and $32,049 during the first six months of 2023 and 2022, respectively.

As of June 30, 2023 and June 30, 2022, there were 177 franchise partner units.

Included in franchise partner fees were $5,763 and $5,057 of rental income during the second quarter of 2023 and 2022, respectively, and $11,338 and $9,831 during the first six months of 2023 and 2022, respectively.

Franchise partners rent buildings and equipment from Steak n Shake.

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

The franchise royalties and fees generated by the traditional franchising business were $4,125 during the second quarter of 2023, as compared to $5,237 during the second quarter of 2022.

Franchise royalties and fees during the first six months of 2023 were $8,383 compared to $10,383 during the first six months of 2022.

There were 138 Steak n Shake traditional units open on June 30, 2023, as compared to 166 units open on June 30, 2022.

The decrease in franchise royalties and fees was primarily due to fewer traditional units open during 2023.

The cost of food at company-operated units during the second quarter of 2023 was $11,702 or 29.6% of net sales, as compared to $11,365 or 30.2% of net sales during the second quarter of 2022.

The cost of food at company-operated units during the first six months of 2023 was $22,150 or 29.0% of net sales, as compared to $22,325 or 29.4% of net sales during the first six months of 2022.

Cost of food expressed as a percentage of net sales remained relatively consistent.

The operating costs at company-operated restaurants during the second quarter of 2023 were $19,295 or 48.8% of net sales, as compared to $20,350 or 54.0% of net sales in the second quarter of 2022.

The operating costs at company-operated restaurants during the first six months of 2023 were $37,752 or 49.4% of net sales, as compared to $40,382 or 53.2% of net sales in 2022.

The decrease in operating costs as a percentage of net sales was mainly attributable to higher net sales.

General and administrative expenses during the second quarter of 2023 were $10,790 or 16.7% of total revenue, as compared to $10,121 or 16.8% of total revenue in the second quarter of 2022.

General and administrative expenses during the first six months of 2023 were $21,253 or 16.9% of total revenue, as compared to $18,771 or 15.6% of total revenue in the first six months of 2022.

The increase in general and administrative expenses was mainly attributable to increased support for franchise partnerships.

Marketing expense decreased by $584 during the first six months of 2023 compared to the first six months of 2022.

The decrease was primarily attributable to reduced marketing by traditional franchisees.

During the first six months of 2023, Steak n Shake sold four properties for a gain of $4,414.

The Company recorded $853 of impairment charges in the second quarter and $1,629 in the first six months of 2023 related to underperforming stores.

The Company recorded $20 of impairment charges in the second quarter and first six months of 2022.

Depreciation and amortization expense was $13,494 during 2023 versus $12,320 during 2022.

The year-over-year increase was primarily attributable to higher capital expenditures incurred in 2022 and 2021.

Interest on obligations under leases was $2,608 during 2023 versus $2,797 during 2022.

The year-over-year decrease in interest expense is primarily attributable to the maturity and retirement of lease obligations.

We view our insurance businesses as possessing two activities:

underwriting and investing.

Underwriting decisions are the responsibility of the unit managers, whereas investing decisions are the responsibility of our Chairman and CEO, Sardar Biglari.

Our business units are operated under separate local management.

Biglari Holdings’ insurance operations consist of First Guard and Southern Pioneer.

Underwriting results of our insurance operations are summarized below.

Second Quarter First Six Months

2023 2022 2023 2022

Underwriting gain attributable to:

First Guard $ 3,155 $ 1,714 $ 5,017 $ 2,446

Southern Pioneer (451) (281) (562) (618)

Pre-tax underwriting gain 2,704 1,433 4,455 1,828

Income tax expense 568 301 936 384

Net underwriting gain $ 2,136 $ 1,132 $ 3,519 $ 1,444

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

Earnings of our insurance operations are summarized below.

Second Quarter First Six Months

2023 2022 2023 2022

Premiums earned $ 15,971 $ 15,226 $ 30,735 $ 29,395

Insurance losses 8,372 9,244 16,968 18,832

Underwriting expenses 4,895 4,549 9,312 8,735

Pre-tax underwriting gain 2,704 1,433 4,455 1,828

Other income and expenses

Investment income 752 257 1,337 470

Other income (expenses) 512 741 963 1,497

Total other income 1,264 998 2,300 1,967

Earnings before income taxes 3,968 2,431 6,755 3,795

Income tax expense 836 572 1,454 892

Contribution to net earnings $ 3,132 $ 1,859 $ 5,301 $ 2,903

Insurance premiums and other on the consolidated statement of earnings includes premiums earned, investment income, other income, and commissions.

First Guard is a direct underwriter of commercial truck insurance, selling physical damage and nontrucking liability insurance to truckers.

First Guard’s insurance products are marketed primarily through direct response methods via the Internet or by telephone.

First Guard’s cost-efficient direct response marketing methods enable it to be a low-cost insurer.

A summary of First Guard’s underwriting results follows.

Second Quarter First Six Months

2023 2022 2023 2022

Amount % Amount % Amount % Amount %

Premiums earned $ 9,215 100.0 % $ 9,015 100.0 % $ 18,114 100.0 % $ 17,746 100.0 %

Insurance losses 4,254 46.2 % 5,465 60.6 % 9,498 52.4 % 11,653 65.7 %

Underwriting expenses 1,806 19.6 % 1,836 20.4 % 3,599 19.9 % 3,647 20.6 %

Total losses and expenses 6,060 65.8 % 7,301 81.0 % 13,097 72.3 % 15,300 86.3 %

Pre-tax underwriting gain $ 3,155 $ 1,714 $ 5,017 $ 2,446

First Guard’s ratio of losses and loss adjustment expenses to premiums earned was 46.2% during the second quarter of 2023 as compared to 60.6% during the second quarter of 2022 and 52.4% during the first six months of 2023 as compared to 65.7% during the first six months of 2022.

First Guard’s underwriting results in 2023 were in line with its historical performance despite cost inflation in property and physical damage claims, which began to accelerate in 2022.

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

Southern Pioneer

Southern Pioneer underwrites garage liability and commercial property insurance, as well as homeowners and dwelling fire insurance.

A summary of Southern Pioneer’s underwriting results follows.

Second Quarter First Six Months

2023 2022 2023 2022

Amount % Amount % Amount % Amount %

Premiums earned $ 6,756 100.0 % $ 6,211 100.0 % $ 12,621 100.0 % $ 11,649 100.0 %

Insurance losses 4,118 61.0 % 3,779 60.8 % 7,470 59.2 % 7,179 61.6 %

Underwriting expenses 3,089 45.7 % 2,713 43.7 % 5,713 45.3 % 5,088 43.7 %

Total losses and expenses 7,207 106.7 % 6,492 104.5 % 13,183 104.5 % 12,267 105.3 %

Pre-tax underwriting gain (loss) $ (451) $ (281) $ (562) $ (618)

Southern Pioneer’s ratio of losses and loss adjustment expenses to premiums earned was 61.0% during the second quarter of 2023 as compared to 60.8% during the second quarter of 2022 and 59.2% during the first six months of 2023 and 61.6% during the first six months of 2022.

Southern Pioneer’s underwriting losses were primarily attributable to weather-related losses in its personal lines as well as a higher expense ratio, an increase caused by information technology projects related to the implementation of a new policy administration system.

A summary of net investment income attributable to our insurance operations follows.

Second Quarter First Six Months

2023 2022 2023 2022

Interest, dividends and other investment income:

First Guard $ 431 $ 122 $ 818 $ 196

Southern Pioneer 321 135 519 274

Pre-tax investment income 752 257 1,337 470

Income tax expense 158 54 281 99

Net investment income $ 594 $ 203 $ 1,056 $ 371

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.

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

A summary of revenues and earnings of our oil and gas operations follows.

Second Quarter First Six Months

2023 2022 2023 2022

Oil and gas revenues $ 10,741 $ 14,440 $ 22,964 $ 24,252

Oil and gas production costs 3,512 3,843 8,983 7,662

Depreciation, depletion and accretion 2,901 1,534 5,751 3,053

General and administrative expenses 1,438 642 3,237 1,195

Earnings before income taxes 2,890 8,421 4,993 12,342

Income tax expense 740 2,052 1,173 3,049

Contribution to net earnings $ 2,150 $ 6,369 $ 3,820 $ 9,293

Our oil and gas business is highly dependent on oil and natural gas prices.

The average West Texas Intermediate price per barrel for the first six months of 2023 was approximately $74.86 as compared to approximately $101.66 in the first six months of 2022.

It is expected that the prices of oil and gas commodities will remain volatile, which will be reflected in our financial results.

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

Earnings for Southern Oil are summarized below.

Second Quarter First Six Months

2023 2022 2023 2022

Oil and gas revenues $ 4,810 $ 14,440 $ 9,781 $ 24,252

Oil and gas production costs 1,868 3,843 4,208 7,662

Depreciation, depletion and accretion 1,168 1,534 2,352 3,053

General and administrative expenses 729 642 1,282 1,195

Earnings before income taxes 1,045 8,421 1,939 12,342

Income tax expense 316 2,052 471 3,049

Contribution to net earnings $ 729 $ 6,369 $ 1,468 $ 9,293

Abraxas Petroleum

Abraxas Petroleum operates oil and gas properties in the Permian Basin of West Texas.

Earnings for Abraxas Petroleum are summarized below.

Second Quarter First Six Months

2023 2022 2023 2022

Oil and gas revenues $ 5,931 $ — $ 13,183 $ —

Oil and gas production costs 1,644 — 4,775 —

Depreciation, depletion and accretion 1,733 — 3,399 —

General and administrative expenses 709 — 1,955 —

Earnings before income taxes 1,845 — 3,054 —

Income tax expense 424 — 702 —

Contribution to net earnings $ 1,421 $ — $ 2,352 $ —

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

Brand Licensing

Maxim’s business lies principally in licensing and media.

Earnings of operations are summarized below.

Second Quarter First Six Months

2023 2022 2023 2022

Licensing and media revenue $ 761 $ 1,249 $ 1,356 $ 1,883

Licensing and media costs 499 677 951 1,630

General and administrative expenses 54 71 75 88

Earnings before income taxes 208 501 330 165

Income tax expense 52 126 83 41

Contribution to net earnings $ 156 $ 375 $ 247 $ 124

We acquired Maxim with the idea of transforming its business model.

The magazine developed the Maxim brand, a franchise we are utilizing to generate nonmagazine revenue, notably through licensing, a cash-generating business related to consumer products, services, and events.

Investment Gains and Investment Partnership Gains

Investment gains net of tax for the second quarter of 2023 were $276 compared to investment losses net of tax for the second quarter of 2022 of $2,805.

Investment gains net of tax for the first six months of 2023 were $3,141 compared to investment gains net of tax for the first six months of 2022 of $2,630.

Dividends earned on investments are reported as investment income by our insurance companies.

We consider investment income as a component of our aggregate insurance operating results.

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

Earnings (loss) from our investments in partnerships are summarized below.

Second Quarter First Six Months

2023 2022 2023 2022

Investment partnership gains (losses) $ (7,496) $ (105,241) $ 65,092 $ (111,902)

Tax expense (benefit) (1,997) (24,894) 14,562 (26,754)

Contribution to net earnings (loss) $ (5,499) $ (80,347) $ 50,530 $ (85,148)

Investment partnership gains include gains/losses from changes in market values of underlying investments and dividends earned by the partnerships.

Dividend income has a lower effective tax rate than income from capital gains.

These gains and losses have caused and will continue to cause significant volatility in our periodic earnings.

The investment partnerships hold the Company’s common stock as investments.

The Company’s pro-rata share of its common stock held by the investment partnerships is recorded as treasury stock even though these shares are legally outstanding.

Gains and losses on Company common stock included in the earnings of the partnerships are eliminated in the Company’s consolidated financial results.

Investment gains and losses in 2023 and 2022 were mainly derived from our investments in equity securities and included unrealized gains and losses from market price changes during the period.

We believe that investment and derivative gains/losses are generally meaningless for analytical purposes in understanding our quarterly and annual results.

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

Interest Expense

The Company’s interest expense is summarized below.

Second Quarter First Six Months

2023 2022 2023 2022

Interest expense on notes payable $ 40 $ — $ 207 $ —

Tax benefit 9 — 47 —

Interest expense net of tax $ 31 $ — $ 160 $ —

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

The balance of the line of credit was $3,600 as of June 30, 2023 and $10,000 as of December 31, 2022.

On June 30, 2023, the interest rate was 7.8%.

Corporate and Other

Corporate expenses exclude the activities of the restaurant, insurance, brand licensing, and oil and gas businesses.

Corporate and other net losses increased during the second quarter and first six months of 2023 compared to the same periods in 2022 primarily because of recording a non-cash write down of a receivable of $1,000 and accruing for incentive fees.

Income tax expense for the second quarter of 2023 was $1,018 compared to an income tax benefit of $22,709 for the second quarter of 2022.

Income tax expense for the first six months of 2023 was $20,756 compared to an income tax benefit of $22,880 for the first six months of 2022.

The variance in income taxes between 2023 and 2022 is attributable to taxes on income generated by the investment partnerships.

Investment partnership pre-tax losses were $7,496 during the second quarter of 2023 compared to pre-tax losses of $105,241 during the second quarter of 2022.

Investment partnership pre-tax gains were $65,092 during the first six months of 2023 compared to pre-tax losses of $111,902 during the first six months of 2022.

Financial Condition

Consolidated cash and investments are summarized below.

2023 December 31,

Cash and cash equivalents $ 30,881 $ 37,467

Investments 88,259 69,466

Fair value of interest in investment partnerships 549,872 383,004

Total cash and investments 669,012 489,937

portion of Company stock held by investment partnerships (321,136) (227,210)

Carrying value of cash and investments on balance sheet $ 347,876 $ 262,727

Unrealized gains/losses of Biglari Holdings’ stock held by the investment partnerships are eliminated in the Company’s consolidated financial results.

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