What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-09 compared with 2024-05-10 · 455 added, 128 removed, 420 unchanged (58% of the section changed)

23 unchanged sentences

Current portion of lease obligations 14,406 14,855

Line of credit 50 —

Total current liabilities 105,773 111,100

17 unchanged sentences

(dollars in thousands except per share amounts)

First Quarter

Second Quarter First Six Months

2024 2023 2024 2023

(Unaudited) (Unaudited)

Restaurant operations $ 64,475 $ 64,491 $ 126,471 $ 125,620

13 unchanged sentences

Interest expense on leases 1,349 1,301 2,663 2,608

Interest expense on debt — 167

Interest expense on borrowings 42 40 42 207

Total costs and expenses 71,437 83,503 155,191 164,630

Investment gains 1,713 3,638

Investment partnership gains 21,985 72,588

Total other income 23,698 76,226

Earnings before income taxes 29,395 85,275

Income tax expense 6,816 19,738

Net earnings 22,579 65,537

Investment gains (losses) ( 2,729 ) 353 ( 1,016 ) 3,991

Investment partnership gains (losses) ( 79,890 ) ( 7,496 ) ( 57,905 ) 65,092

Total other income (expenses) ( 82,619 ) ( 7,143 ) ( 58,921 ) 69,083

Earnings (loss) before income taxes ( 62,915 ) 2,894 ( 33,520 ) 88,169

Income tax expense (benefit) ( 14,725 ) 1,018 ( 7,909 ) 20,756

Net earnings (loss) ( 48,190 ) 1,876 ( 25,611 ) 67,413

Earnings attributable to noncontrolling interest — ( 60 ) — 591

Net earnings attributable to Biglari Holdings Inc.

Net earnings (loss) attributable to Biglari Holdings Inc.

shareholders $ ( 48,190 ) $ 1,936 $ ( 25,611 ) $ 66,822

Net earnings per average equivalent Class A share* $ 79.56 $ 222.28

* Net earnings per average equivalent Class B share outstanding are one-fifth of the average equivalent Class A share or $ 15.91 for the first quarter of 2024 and $ 44.46 for the first quarter of 2023.

Net earnings (loss) per average equivalent Class A share * $ ( 171.89 ) $ 6.64 $ ( 90.80 ) $ 229.00

*Net earnings (loss) per average equivalent Class B share outstanding are one-fifth of the average equivalent Class A share or $( 34.38 ) and $( 18.16 ) for the second quarter and first six months of 2024, respectively, and $ 1.33 and $ 45.80 for the second quarter and first six months of 2023, respectively.

See accompanying Notes to Consolidated Financial Statements.

2 unchanged sentences

(dollars in thousands)

First Quarter

Net earnings $ 22,579 $ 65,537

Second Quarter First Six Months

2024 2023 2024 2023

(Unaudited) (Unaudited)

Net earnings (loss) $ ( 48,190 ) $ 1,876 $ ( 25,611 ) $ 67,413

Foreign currency translation ( 118 ) ( 322 ) ( 149 ) 10

Comprehensive income 22,548 65,869

Comprehensive income attributable to noncontrolling interest — 651

Total comprehensive income attributable to Biglari Holdings Inc.

Comprehensive income (loss) ( 48,308 ) 1,554 ( 25,760 ) 67,423

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

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

shareholders $ ( 48,308 ) $ 1,614 $ ( 25,760 ) $ 66,832

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 2024

Balance at December 31, 2023 $ 1,138 $ 385,594 $ 631,458 $ ( 2,518 ) $ ( 416,342 ) $ — $ 599,330

Net earnings 22,579 22,579

Other comprehensive income (loss) ( 31 ) ( 31 )

Adjustment for holdings in investment partnerships ( 3,306 ) ( 3,306 )

Balance at March 31, 2024 $ 1,138 $ 385,594 $ 654,037 $ ( 2,549 ) $ ( 419,648 ) $ — $ 618,572

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 64,886 651 65,537

Other comprehensive income (loss) 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

See accompanying Notes to Consolidated Financial Statements.

2 unchanged sentences

(dollars in thousands)

First Quarter

First Six Months

Operating activities

Net earnings $ 22,579 $ 65,537

Adjustments to reconcile net earnings to operating cash flows:

Depreciation and amortization 10,053 9,940

Net earnings (loss) $ ( 25,611 ) $ 67,413

Adjustments to reconcile net earnings (loss) to operating cash flows:

Depreciation, depletion, and amortization 19,175 20,034

Provision for deferred income taxes ( 11,656 ) 16,842

1 unchanged sentence

Gains on sale of assets ( 19,618 ) ( 4,194 )

Investment and investment partnerships gains ( 23,698 ) ( 76,226 )

Investment and investment partnership gains and losses 58,921 ( 69,083 )

Distributions from investment partnerships 1,000 —

Changes in receivables and inventories ( 2,249 ) 2,006

Changes in receivables, inventories and other assets 1,234 4,989

Changes in accounts payable and accrued expenses ( 3,642 ) ( 6,112 )

3 unchanged sentences

Proceeds from property and equipment disposals 21,820 9,670

Purchases of noncontrolling interests — ( 5,387 )

Purchases of interests in limited partnerships ( 22,924 ) ( 9,100 )

3 unchanged sentences

Financing activities

Repayments of borrowings — ( 3,500 )

Proceeds from line of credit 6,050 5,000

Payments on line of credit ( 6,000 ) ( 11,400 )

Principal payments on direct financing lease obligations ( 2,741 ) ( 3,078 )

Net cash used in financing activities ( 2,691 ) ( 9,478 )

Effects of foreign currency exchange rate changes ( 10 ) 8

Increase in cash, cash equivalents and restricted cash 6,470 2,146

Effect of exchange rate changes on cash ( 7 ) 98

Decrease in cash, cash equivalents and restricted cash ( 1,374 ) ( 6,336 )

Cash, cash equivalents and restricted cash at beginning of year 29,654 38,805

Cash, cash equivalents and restricted cash at end of first quarter $ 36,124 $ 40,951

First Quarter

Cash, cash equivalents and restricted cash at end of second quarter $ 28,280 $ 32,469

Cash and cash equivalents $ 26,897 $ 30,881

Restricted cash in other long-term assets 1,383 1,588

Cash, cash equivalents and restricted cash at end of first quarter $ 36,124 $ 40,951

Cash, cash equivalents and restricted cash at end of second quarter $ 28,280 $ 32,469

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 2024

Balance at December 31, 2023 $ 1,138 $ 385,594 $ 631,458 $ ( 2,518 ) $ ( 416,342 ) $ — $ 599,330

Net earnings (loss) 22,579 22,579

Other comprehensive loss ( 31 ) ( 31 )

Adjustment for holdings in investment partnerships ( 3,306 ) ( 3,306 )

Balance at March 31, 2024 $ 1,138 $ 385,594 $ 654,037 $ ( 2,549 ) $ ( 419,648 ) $ — $ 618,572

Net earnings (loss) ( 48,190 ) ( 48,190 )

Other comprehensive loss ( 118 ) ( 118 )

Adjustment for holdings in investment partnerships ( 1,085 ) ( 1,085 )

Balance at June 30, 2024 $ 1,138 $ 385,594 $ 605,847 $ ( 2,667 ) $ ( 420,733 ) $ — $ 569,179

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 on 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

See accompanying Notes to Consolidated Financial Statements.

BIGLARI HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

June 30, 2024

(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, 2024, Mr.

As of June 30, 2024, Mr.

Biglari beneficially owns shares of the Company that represent approximately 71.5 % of the voting interest.

4 unchanged sentences

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.

The shares of Company stock attributable to our limited partner interest in The Lion Fund, L.P., and The Lion Fund II, L.P., (collectively, the “investment partnerships”) — based on our proportional ownership during this period — are considered treasury stock on the consolidated balance sheet and thereby deemed not to be included in the calculation of weighted average common shares outstanding.

However, these shares are legally outstanding.

The following table presents shares authorized, issued, and outstanding on March 31, 2024 and December 31, 2023.

March 31, 2024 December 31, 2023

Earnings Per Share (continued)

The following table presents shares authorized, issued and outstanding on June 30, 2024 and December 31, 2023.

June 30, 2024 December 31, 2023

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, 2024 March 31, 2023

Second Quarter First Six Months

2024 2023 2024 2023

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 2024 and 2023 were $ 1,713 and $ 3,638 , respectively.

Investment losses for the second quarter and first six months of 2024 were $ 2,729 and $ 1,016 , respectively.

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

5 unchanged sentences

Changes in proportionate share of Company stock held 4,391 ( 4,391 )

Partnership interest at March 31, 2024 $ 544,909 $ 324,152 $ 220,757

Partnership interest at June 30, 2024 $ 482,051 $ 323,320 $ 158,731

Fair Value Company

2 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

Investment Partnerships (continued)

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

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

3 unchanged sentences

Carrying value of investment partnerships net of deferred taxes $ 145,251 $ 171,207

We expect that a majority of the $ 31,314 and $ 27,896 deferred tax liabilities enumerated above will not become due until the dissolution of the investment partnerships.

The Company’s proportionate share of Company stock held by investment partnerships at cost was $ 419,648 and $ 416,342 as of March 31, 2024, and December 31, 2023, respectively.

We expect that a majority of the $ 13,480 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 $ 420,733 and $ 416,342 at June 30, 2024 and December 31, 2023, 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

Gains from investment partnerships $ 21,985 $ 72,588

Tax expense 4,837 16,559

Contribution to net earnings $ 17,148 $ 56,029

Second Quarter First Six Months

2024 2023 2024 2023

Gains (losses) from investment partnerships $ ( 79,890 ) $ ( 7,496 ) $ ( 57,905 ) $ 65,092

Tax expense (benefit) ( 19,142 ) ( 1,997 ) ( 14,305 ) 14,562

Contribution to net earnings (loss) $ ( 60,748 ) $ ( 5,499 ) $ ( 43,600 ) $ 50,530

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 2024 and 2023.

There were no incentive reallocations accrued during the first six months of 2024 and 2023.

Investment Partnerships (continued)

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

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, 2024 $ 425,899 $ 412,720

Total liabilities as of March 31, 2024 $ 31,718 $ 193,830

Revenue for the first quarter of 2024 $ 50,262 $ 31,118

Earnings for the first quarter of 2024 $ 49,820 $ 28,237

Biglari Holdings’ ownership interest as of March 31, 2024 89.9 % 86.3 %

Total assets as of June 30, 2024 $ 408,170 $ 331,486

Total liabilities as of June 30, 2024 $ 24,074 $ 179,033

Revenue for the first six months of 2024 $ 33,316 $ ( 42,355 )

Earnings for the first six months of 2024 $ 32,417 $ ( 48,207 )

Biglari Holdings’ ownership interest as of June 30, 2024 90.2 % 87.3 %

Total assets as of December 31, 2023 $ 371,365 $ 373,302

Total liabilities as of December 31, 2023 $ 26,594 $ 185,024

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 %

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 %

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 $ 381,078 $ 380,491

Depletion expense related to oil and gas properties was $ 2,568 and $ 2,648 during the first quarter of 2024 and 2023, respectively.

The Company recorded an impairment to restaurant long-lived assets of $ 107 in the first quarter of 2024 and $ 776 in the first quarter of 2023 related to underperforming stores.

Property and equipment held for sale of $ 1,149 and $ 773 are recorded in other current assets as of March 31, 2024, and December 31, 2023, respectively.

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

During the first quarter of 2024 and 2023, the Company sold former company-operated restaurants for a gain of $ 767 and $ 1,431 , respectively.

Depletion expense related to oil and gas properties was $ 4,227 and $ 5,386 during the first six months of 2024 and 2023, respectively.

The Company did not record an impairment to restaurant long-lived assets in the second quarter of 2024 but did record $ 833 in the second quarter of 2023.

The Company recorded an impairment to restaurant long-lived assets related to underperforming stores of $ 107 and $ 1,609 in the first six months of 2024 and 2023, respectively.

Property and equipment held for sale of $ 1,137 and $ 773 are recorded in other assets as of June 30, 2024 and December 31, 2023, respectively.

The assets classified as held for sale at June 30, 2024 include two properties owned by Steak n Shake, which were previously company-operated restaurants.

During the first six months of 2024, the Company sold former company-operated restaurants for a gain of $ 2,909 .

During the first six months of 2023, the Company sold former company-operated restaurants for a gain of $ 4,414 and Abraxas Petroleum sold its office building with no gain or loss recorded.

Goodwill and Other Intangible Assets

3 unchanged sentences

Goodwill $ 53,830

Accumulated impairment losses ( 300 )

Change in foreign exchange rates during the first quarter of 2024 ( 9 )

Goodwill at March 31, 2024

Impairments prior to 2024 ( 300 )

Impairment during the first six months of 2024 ( 1,000 )

Change in foreign exchange rates during the first six months of 2024 ( 17 )

Goodwill at June 30, 2024

Goodwill and indefinite-lived intangible asset impairment reviews include determining the estimated fair values of our reporting units and indefinite-lived intangible assets.

4 unchanged sentences

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 2024 or 2023.

There was no impairment recorded by Steak n Shake for goodwill during the first six months of 2024 or 2023.

During the second quarter of 2024, we performed our annual assessment of our recoverability of goodwill related to Western Sizzlin and an impairment to goodwill of $ 1,000 was recorded.

Western Sizzlin did not record an impairment for goodwill during the first six months of 2023.

There was no impairment recorded for intangible assets during the first six months of 2024 and a $ 20 impairment was recorded in the first six months of 2023.

Other Intangible Assets

3 unchanged sentences

Intangibles $ 15,876 $ 11,102 $ 26,978

Accumulated impairment losses — ( 3,748 ) ( 3,748 )

Impairments prior to 2024 — ( 3,748 ) ( 3,748 )

15,876 7,354 23,230

Change in foreign exchange rates during the first quarter of 2024 — ( 109 ) ( 109 )

Balance at March 31, 2024

Change in foreign exchange rates during the first six months of 2024 — ( 203 ) ( 203 )

Balance at June 30, 2024

$ 15,876 $ 7,151 $ 23,027

1 unchanged sentence

Restaurant operations revenues were as follows.

First Quarter

Second Quarter First Six Months

2024 2023 2024 2023

Net sales $ 40,815 $ 39,524 $ 79,550 $ 76,418

3 unchanged sentences

$ 64,475 $ 64,491 $ 126,471 $ 125,620

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 2024 and 2023, restaurant operations recognized $ 5,705 and $ 5,575 , respectively, in franchise partner fees related to rental income.

During the second quarter of 2024 and 2023, restaurant operations recognized $ 5,780 and $ 5,763 , respectively, in franchise partner fees related to rental income.

During the first six months ended June 30, 2024 and June 30, 2023, restaurant operations recognized $ 11,485 and $ 11,338 , respectively, in franchise partner fees related to rental income.

Franchise Royalties and Fees

20 unchanged sentences

Accounts payable and accrued expenses $ 60,126 $ 66,743

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.

There was no balance on the line of credit on March 31, 2024, or December 31, 2023.

There was no balance on the line of credit on June 30, 2024, or December 31, 2023.

Western Sizzlin Revolver

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

As of March 31, 2024, and December 31, 2023, Western Sizzlin had no debt outstanding under its revolver.

Unpaid Loss and Loss Adjustment Expenses

As of June 30, 2024, Western Sizzlin had a balance of $ 50 under its revolver.

As of December 31, 2023, there was 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 ended March 31, 2024 and 2023 follows.

March 31, March 31,

A reconciliation of the changes in claim liabilities, net of reinsurance, for each of the six month periods ended June 30, 2024 and 2023 follows.

2024 June 30,

Balances at beginning of year:

10 unchanged sentences

Total 21,682 19,093

Balances at March 31:

Balances at June 30:

Net liabilities 15,695 14,680

1 unchanged sentence

Gross liabilities $ 15,967 $ 15,830

We recorded net reductions of estimated ultimate liabilities for prior accident years of $ 3,319 and $ 1,651 in the first quarter of 2024 and 2023, 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 $ 1,330 and $ 3,016 in the first six months of 2024 and 2023, 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 8.8 % in 2024 and 17.9 % in 2023.

1 unchanged sentence

Lease obligations include the following.

Current portion of lease obligations March 31,

Current portion of lease obligations June 30,

2024 December 31,

8 unchanged sentences

Total long-term lease obligations $ 92,906 $ 86,389

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

2024 2023 2024 2023

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 $ 5,409 $ 6,689

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, 2024 are as follows.

Maturities of lease liabilities as of June 30, 2024 are as follows.

Year Operating

9 unchanged sentences

Total lease liabilities $ 37,133 $ 4,602

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

2024 2023 2024 2023

Operating lease income $ 4,236 $ 4,044 $ 8,417 $ 8,129

1 unchanged sentence

Total lease income $ 6,060 $ 5,965 $ 12,040 $ 11,834

The following table displays the Company’s future minimum rental receipts for non-cancelable leases and subleases as of March 31, 2024.

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, 2024.

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

4 unchanged sentences

Total future minimum receipts $ 1,353 $ 4,283

In determining the quarterly provision for income taxes, the Company used an estimated annual effective tax rate for the first quarter of 2024 and 2023.

In determining the quarterly provision for income taxes, the Company used an estimated annual effective tax rate for the first six months of 2024 and 2023.

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 2024 was $ 6,816 compared to $ 19,738 for the first quarter of 2023.

The variance in income taxes between 2024 and 2023 is primarily attributable to taxes on income generated by the investment partnerships.

Investment partnership pre-tax gains were $ 21,985 during the first quarter of 2024 compared to pre-tax gains of $ 72,588 during the first quarter of 2023.

Income tax benefit for the second quarter of 2024 was $ 14,725 compared to an income tax expense of $ 1,018 for the second quarter of 2023.

Income tax benefit for the first six months of 2024 was $ 7,909 compared to an income tax expense of $ 20,756 for the first six months of 2023.

The variance in income taxes between 2024 and 2023 is attributable to taxes on income generated by the investment partnerships.

Investment partnership pre-tax losses were $ 79,890 during the second quarter of 2024 compared to pre-tax losses of $ 7,496 during the second quarter of 2023.

Investment partnership pre-tax losses were $ 57,905 during the first six months of 2024 compared to pre-tax gains of $ 65,092 during the first six months of 2023.

Commitments and Contingencies

12 unchanged sentences

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.

Pricing evaluations generally reflect discounted expected future cash flows, which incorporate yield curves for instruments with similar

Fair Value of Financial Assets (continued)

characteristics, such as credit ratings, estimated durations and yields for other instruments of the issuer or entities in the same industry sector.

• Level 3 – Inputs include unobservable inputs used in the measurement of assets and liabilities.

8 unchanged sentences

Bonds are classified as Level l of the fair value hierarchy.

Fair Value of Financial Assets (continued)

As of March 31, 2024, and December 31, 2023, the fair values of financial assets were as follows.

March 31, 2024 December 31, 2023

As of June 30, 2024 and December 31, 2023, the fair values of financial assets were as follows.

June 30, 2024 December 31, 2023

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

11 unchanged sentences

Biglari Enterprises is owned by Mr.

The Company paid Biglari Enterprises $ 2,400 and $ 2,100 in service fees during the first quarter of 2024 and 2023, respectively.

The Company paid Biglari Enterprises $ 4,800 in service fees during the first six months of 2024 and $ 4,200 during the first six months of 2023.

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

11 unchanged sentences

The Company also reports segment information for Maxim.

Other business activities not specifically identified with reportable business segments are presented in corporate.

We report our earnings from investment partnerships separate from our corporate expenses.

2 unchanged sentences

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

Business Segment Reporting (continued)

A disaggregation of our consolidated data for the first quarters of 2024 and 2023 is presented in the tables which follow.

First Quarter

A disaggregation of our consolidated data for the second quarters and first six months of 2024 and 2023 is presented in the tables which follow.

Second Quarter First Six Months

2024 2023 2024 2023

Operating Businesses:

4 unchanged sentences

Insurance Operations:

Underwriting:

First Guard 9,494 9,215 18,804 18,114

9 unchanged sentences

Business Segment Reporting (continued)

Earnings (Loss) Before Income Taxes

First Quarter

Earnings (Losses) Before Income Taxes

Second Quarter First Six Months

2024 2023 2024 2023

Operating Businesses:

16 unchanged sentences

Total Operating Businesses 24,669 16,253 32,905 28,895

Goodwill impairment ( 1,000 ) — ( 1,000 ) —

Corporate and other ( 3,965 ) ( 6,216 ) ( 6,504 ) ( 9,809 )

Investment gains 1,713 3,638

Investment partnership gains 21,985 72,588

Investment gains (losses) ( 2,729 ) 353 ( 1,016 ) 3,991

Investment partnership gains (losses) ( 79,890 ) ( 7,496 ) ( 57,905 ) 65,092

$ ( 62,915 ) $ 2,894 $ ( 33,520 ) $ 88,169

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, 2024, Mr.

Biglari beneficially owns shares of the Company that represent approximately 71.5% of the voting interest.

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

2024 2023 2024 2023

Operating businesses:

Restaurant $ 4,244 $ 6,935 $ 7,717 $ 12,775

Insurance 1,454 3,132 3,192 5,301

Oil and gas 13,369 2,150 14,518 3,820

Brand licensing (193) 156 (458) 247

Interest expense (32) (31) (32) (160)

Total operating businesses 18,842 12,342 24,937 21,983

Goodwill impairment (1,000) — (1,000) —

Corporate and other (3,125) (5,243) (5,121) (8,241)

Investment partnership gains (losses) (60,748) (5,499) (43,600) 50,530

Investment gains (losses) (2,159) 276 (827) 3,141

Net earnings (loss) (48,190) 1,876 (25,611) 67,413

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

Net earnings (loss) attributable to Biglari Holdings Inc.

shareholders $ (48,190) $ 1,936 $ (25,611) $ 66,822

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 477 company-operated and franchise restaurants as of June 30, 2024.

Steak n Shake Western Sizzlin

operated Franchise

Partner Traditional

Franchise Company-

operated Franchise Total

Total stores as of December 31, 2023

148 181 128 3 32 492

Corporate stores transitioned (1) 1 — — — —

Net restaurants opened (closed) (5) — (8) — (2) (15)

Total stores as of June 30, 2024

142 182 120 3 30 477

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

As of June 30, 2024, 15 of the 142 company-operated Steak n Shake stores were closed.

Steak n Shake plans to sell or lease 8 of the 15 locations and refranchise the balance.

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

Restaurant operations are summarized below.

Second Quarter First Six Months

2024 2023 2024 2023

Net sales $ 40,815 $ 39,524 $ 79,550 $ 76,418

Franchise partner fees 18,149 19,070 35,907 36,982

Franchise royalties and fees 3,615 4,125 7,092 8,383

Other revenue 1,896 1,772 3,922 3,837

Total revenue 64,475 64,491 126,471 125,620

Restaurant cost of sales

Cost of food 12,357 30.3 % 11,702 29.6 % 23,331 29.3 % 22,150 29.0 %

Labor costs 12,992 31.8 % 12,175 30.8 % 25,536 32.1 % 23,885 31.3 %

Occupancy and other 11,537 28.3 % 11,051 28.0 % 22,440 28.2 % 21,631 28.3 %

Total cost of sales 36,886 34,928 71,307 67,666

Selling, general and administrative

General and administrative 13,016 20.2 % 10,790 16.7 % 24,746 19.6 % 21,253 16.9 %

Marketing 2,857 4.4 % 3,294 5.1 % 5,802 4.6 % 6,247 5.0 %

Other expenses (income) (2,208) (3.4) % (2,689) (4.2) % (2,442) (1.9) % (4,301) (3.4) %

Total selling, general and administrative 13,665 21.2 % 11,395 17.7 % 28,106 22.2 % 23,199 18.5 %

Impairments — — % 853 1.3 % 107 0.1 % 1,629 1.3 %

Depreciation and amortization 6,810 10.6 % 6,787 10.5 % 13,645 10.8 % 13,494 10.7 %

Interest on finance leases and obligations 1,349 1,301 2,663 2,608

Earnings before income taxes 5,765 9,227 10,643 17,024

Income tax expense 1,521 2,292 2,926 4,249

Contribution to net earnings $ 4,244 $ 6,935 $ 7,717 $ 12,775

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 2024 were $40,815 and $79,550, respectively, representing an increase of $1,291 or 3.3% and $3,132 or 4.1%, compared to the second quarter and first six months of 2023, respectively.

The increase in net sales was primarily due to an increase in Steak n Shake’s same-store sales of 7.0% during the second quarter of 2024.

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.

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

Our franchise partner fees were $18,149 during the second quarter of 2024, as compared to $19,070 during the second quarter of 2023.

Franchise partner fees were $35,907 and $36,982 during the first six months of 2024 and 2023, respectively.

As of June 30, 2024 and June 30, 2023, there were 182 and 177 franchise partner units, respectively.

Included in franchise partner fees were $5,780 and $5,763 of rental income during the second quarter of 2024 and 2023, respectively, and $11,485 and $11,338 during the first six months of 2024 and 2023, respectively.

Franchise partners rent buildings and equipment from Steak n Shake.

Our share of franchise partner fees was lower primarily because our franchise partners’ food and labor expenses were higher during the first six months of 2024 as compared to the first six months of 2023.

The franchise royalties and fees generated by the traditional franchising business were $3,615 during the second quarter of 2024, as compared to $4,125 during the second quarter of 2023.

Franchise royalties and fees during the first six months of 2024 were $7,092 as compared to $8,383 during the first six months of 2023.

There were 120 Steak n Shake traditional units open on June 30, 2024, as compared to 138 units open on June 30, 2023.

The decrease in franchise royalties and fees was primarily due to fewer traditional units open during 2024.

The cost of food at company-operated units during the second quarter of 2024 was $12,357 or 30.3% of net sales, as compared to $11,702 or 29.6% of net sales during the second quarter of 2023.

The cost of food at company-operated units during the first six months of 2024 was $23,331 or 29.3% of net sales, as compared to $22,150 or 29.0% of net sales during the first six months of 2023.

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

Labor costs at company-operated restaurants during the second quarter of 2024 were $12,992 or 31.8% of net sales, as compared to $12,175 or 30.8% of net sales in the second quarter of 2023.

Labor costs at company-operated restaurants during the first six months of 2024 were $25,536 or 32.1% of net sales, as compared to $23,885 or 31.3% of net sales in 2023.

Labor costs expressed as a percentage of net sales increased during 2024 compared to 2023 primarily due to an increase in store level managers in Steak n Shake company-operated restaurants.

General and administrative expenses during the second quarter of 2024 were $13,016 or 20.2% of total revenue, as compared to $10,790 or 16.7% of total revenue in the second quarter of 2023.

General and administrative expenses during the first six months of 2024 were $24,746 or 19.6% of total revenue, as compared to $21,253 or 16.9% of total revenue in the first six months of 2023.

The increase in general and administrative expenses was mainly attributable to higher personnel costs at Steak n Shake.

The Company recorded $853 of impairment charges in the second quarter of 2023 and $107 and $1,629 in the first six months of 2024 and 2023, respectively, related to underperforming stores.

Interest on obligations under leases was $2,663 during 2024 versus $2,608 during 2023.

Other income was $2,442 during 2024 versus $4,301 during 2023.

During 2024, Western Sizzlin received a settlement of $450.

During 2024, Steak n Shake sold three properties for a gain of $1,957 and sold four properties for a gain of $4,414 during 2023.

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

To better convey the performance of the franchise partnership model, the table below shows the underlying sales, cost of food, labor costs, and other restaurant costs of the franchise partners.

We believe the franchise partner information is useful to readers, as they have a direct effect on Steak n Shake’s profitability.

Second Quarter First Six Months

2024 2023 2024 2023

Net sales and other $ 83,470 $ 83,009 $ 164,258 $ 160,961

Restaurant cost of sales

Cost of food $ 24,840 29.8 % $ 23,098 27.8 % $ 48,010 29.2 % $ 43,969 27.3 %

Labor costs 22,305 26.7 % 22,000 26.5 % 44,070 26.8 % 42,940 26.7 %

Occupancy and other 17,163 20.6 % 16,290 19.6 % 33,941 20.7 % 32,157 20.0 %

Total cost of sales $ 64,308 $ 61,388 $ 126,021 $ 119,066

The Company’s consolidated financial statements do not include data in the table above.

Figures are shown for information purposes only.

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

2024 2023 2024 2023

Underwriting gain attributable to:

First Guard $ 1,331 $ 3,155 $ 2,131 $ 5,017

Southern Pioneer (785) (451) (726) (562)

Pre-tax underwriting gain 546 2,704 1,405 4,455

Income tax expense 115 568 295 936

Net underwriting gain $ 431 $ 2,136 $ 1,110 $ 3,519

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

2024 2023 2024 2023

Premiums earned $ 16,291 $ 15,971 $ 32,213 $ 30,735

Insurance losses 10,962 8,372 21,840 16,968

Underwriting expenses 4,783 4,895 8,968 9,312

Pre-tax underwriting gain 546 2,704 1,405 4,455

Other income and expenses

Investment income 955 752 1,870 1,337

Other income (expenses) 349 512 821 963

Total other income 1,304 1,264 2,691 2,300

Earnings before income taxes 1,850 3,968 4,096 6,755

Income tax expense 396 836 904 1,454

Contribution to net earnings $ 1,454 $ 3,132 $ 3,192 $ 5,301

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

2024 2023 2024 2023

Amount % Amount % Amount % Amount %

Premiums earned $ 9,494 100.0 % $ 9,215 100.0 % $ 18,804 100.0 % $ 18,114 100.0 %

Insurance losses 6,161 64.9 % 4,254 46.2 % 12,936 68.8 % 9,498 52.4 %

Underwriting expenses 2,002 21.1 % 1,806 19.6 % 3,737 19.9 % 3,599 19.9 %

Total losses and expenses 8,163 86.0 % 6,060 65.8 % 16,673 88.7 % 13,097 72.3 %

Pre-tax underwriting gain $ 1,331 $ 3,155 $ 2,131 $ 5,017

First Guard produced an underwriting gain in the second quarter and first six months of 2024, despite having a higher ratio of losses and loss adjustment expenses to premiums earned (64.9% in the second quarter and 68.8% in the first six months) than it had in 2023 (46.2% in the second quarter and 52.4% in the first six months).

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

2024 2023 2024 2023

Amount % Amount % Amount % Amount %

Premiums earned $ 6,797 100.0 % $ 6,756 100.0 % $ 13,409 100.0 % $ 12,621 100.0 %

Insurance losses 4,801 70.6 % 4,118 61.0 % 8,904 66.4 % 7,470 59.2 %

Underwriting expenses 2,781 40.9 % 3,089 45.7 % 5,231 39.0 % 5,713 45.3 %

Total losses and expenses 7,582 111.5 % 7,207 106.7 % 14,135 105.4 % 13,183 104.5 %

Pre-tax underwriting gain (loss) $ (785) $ (451) $ (726) $ (562)

Southern Pioneer’s ratio of losses and loss adjustment expenses to premiums earned was 70.6% during the second quarter of 2024 as compared to 61.0% during the second quarter of 2023 and 66.4% during the first six months of 2024 as compared to 59.2% during the first six months of 2023.

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

Second Quarter First Six Months

2024 2023 2024 2023

Interest, dividends and other investment income:

First Guard $ 533 $ 431 $ 1,103 $ 818

Southern Pioneer 422 321 767 519

Pre-tax investment income 955 752 1,870 1,337

Income tax expense 201 158 393 281

Net investment income $ 754 $ 594 $ 1,477 $ 1,056

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

2024 2023 2024 2023

Oil and gas revenues $ 8,671 $ 10,741 $ 18,181 $ 22,964

Oil and gas production costs 4,282 3,512 8,781 8,983

Depreciation, depletion and accretion 1,878 2,901 4,670 5,751

Gain on sale of properties (16,165) — (16,646) —

General and administrative expenses 1,325 1,438 2,559 3,237

Earnings before income taxes 17,351 2,890 18,817 4,993

Income tax expense 3,982 740 4,299 1,173

Contribution to net earnings $ 13,369 $ 2,150 $ 14,518 $ 3,820

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

The lower natural gas prices and lower production during 2024 caused decreases in revenues and production costs.

Production decreases were primarily because several gas wells were shut-in along with the natural depletion of oil and gas reserves.

During the first six months of 2024, Abraxas Petroleum recorded a gain of $16,646 as a result of selling undeveloped reserves to an unaffiliated party whose aim is to conduct development activities;

however, Abraxas Petroleum will not be required to fund any exploration expenditures on its undeveloped properties.

During the third quarter of 2023, Abraxas Petroleum entered into a similar royalty-based arrangement on its undeveloped properties.

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

2024 2023 2024 2023

Oil and gas revenues $ 4,992 $ 5,931 $ 10,860 $ 13,183

Oil and gas production costs 2,266 1,644 5,085 4,775

Depreciation, depletion and accretion 781 1,733 2,328 3,399

Gain on sale of properties (16,165) — (16,646) —

General and administrative expenses 696 709 1,292 1,955

Earnings before income taxes 17,414 1,845 18,801 3,054

Income tax expense 4,013 424 4,332 702

Contribution to net earnings $ 13,401 $ 1,421 $ 14,469 $ 2,352

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

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

2024 2023 2024 2023

Oil and gas revenues $ 3,679 $ 4,810 $ 7,321 $ 9,781

Oil and gas production costs 2,016 1,868 3,696 4,208

Depreciation, depletion and accretion 1,097 1,168 2,342 2,352

General and administrative expenses 629 729 1,267 1,282

Earnings (loss) before income taxes (63) 1,045 16 1,939

Income tax expense (benefit) (31) 316 (33) 471

Contribution to net earnings (loss) $ (32) $ 729 $ 49 $ 1,468

Brand Licensing

Maxim’s business lies principally in licensing and media.

Earnings of operations are summarized below.

Second Quarter First Six Months

2024 2023 2024 2023

Licensing and media revenue $ 301 $ 761 $ 513 $ 1,356

Licensing and media costs 523 499 1,026 951

General and administrative expenses 33 54 96 75

Earnings (loss) before income taxes (255) 208 (609) 330

Income tax expense (benefit) (62) 52 (151) 83

Contribution to net earnings (loss) $ (193) $ 156 $ (458) $ 247

Licensing revenue was lower during 2024 as compared to 2023 primarily due to fewer licensing events in the first six months of 2024.

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 losses net of tax for the second quarter of 2024 were $2,159 as compared to investment gains net of tax for the second quarter of 2023 of $276.

Investment losses net of tax for the first six months of 2024 were $827 as compared to investment gains net of tax for the first six months of 2023 of $3,141.

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

2024 2023 2024 2023

Investment partnership gains (losses) $ (79,890) $ (7,496) $ (57,905) $ 65,092

Tax expense (benefit) (19,142) (1,997) (14,305) 14,562

Contribution to net earnings (loss) $ (60,748) $ (5,499) $ (43,600) $ 50,530

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

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 2024 and 2023 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.

Interest Expense

The Company’s interest expense is summarized below.

Second Quarter First Six Months

2024 2023 2024 2023

Interest expense on notes payable $ 42 $ 40 $ 42 $ 207

Tax benefit 10 9 10 47

Interest expense net of tax $ 32 $ 31 $ 32 $ 160

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

There was no balance on the line of credit on June 30, 2024, or December 31, 2023.

Corporate and Other

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

Corporate and other net losses during the second quarter and first six months of 2024 decreased as compared to the same periods in 2023 because of lower incentive fees accrued.

Income tax benefit for the second quarter of 2024 was $14,725 compared to income tax expense of $1,018 for the second quarter of 2023.

Income tax benefit for the first six months of 2024 was $7,909 compared to income tax expense of $20,756 for the first six months of 2023.

The variance in income taxes between 2024 and 2023 is attributable to taxes on income generated by the investment partnerships.

Investment partnership pre-tax losses were $79,890 during the second quarter of 2024 compared to pre-tax losses of $7,496 during the second quarter of 2023.

Investment partnership pre-tax losses were $57,905 during the first six months of 2024 compared to pre-tax gains of $65,092 during the first six months of 2023.

Financial Condition

Consolidated cash and investments are summarized below.

2024 December 31, 2023

Cash and cash equivalents $ 26,897 $ 28,066

Investments 93,619 91,879

Fair value of interest in investment partnerships 482,051 472,772

Total cash and investments 602,567 592,717

portion of Company stock held by investment partnerships (323,320) (273,669)

Carrying value of cash and investments on balance sheet $ 279,247 $ 319,048

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