What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-08 compared with 2024-08-09 · 163 added, 140 removed, 735 unchanged (29% of the section changed)

3 unchanged sentences

(dollars in thousands)

September 30,

2024 December 31,

18 unchanged sentences

Current portion of lease obligations 14,359 14,855

Line of credit 50 —

Total current liabilities 112,045 111,100

Lease obligations 91,989 86,389

Line of credit 9,000 —

Deferred taxes 35,194 37,939

15 unchanged sentences

(dollars in thousands except per share amounts)

Second Quarter First Six Months

Third Quarter First Nine Months

2024 2023 2024 2023

27 unchanged sentences

Net earnings (loss) per average equivalent Class A share * $ 114.77 $ ( 195.55 ) $ 23.15 $ 35.44

*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.

*Net earnings (loss) per average equivalent Class B share outstanding are one-fifth of the average equivalent Class A share or $ 22.95 and $ 4.63 for the third quarter and first nine months of 2024, respectively, and $( 39.11 ) and $ 7.09 for the third quarter and first nine months of 2023, respectively.

See accompanying Notes to Consolidated Financial Statements.

2 unchanged sentences

(dollars in thousands)

Second Quarter First Six Months

Third Quarter First Nine Months

2024 2023 2024 2023

3 unchanged sentences

Comprehensive income (loss) 32,613 ( 56,800 ) 6,853 10,623

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

Comprehensive income attributable to noncontrolling interests — — — 591

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

4 unchanged sentences

(dollars in thousands)

First Six Months

First Nine Months

Operating activities

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

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

Net earnings $ 6,514 $ 10,899

Adjustments to reconcile net earnings to operating cash flows:

Depreciation, depletion, and amortization 29,760 29,645

19 unchanged sentences

Principal payments on direct financing lease obligations ( 4,131 ) ( 4,618 )

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

Net cash provided by financing activities 4,869 4,382

Effect of exchange rate changes on cash ( 42 ) ( 56 )

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

Increase (decrease) in cash, cash equivalents and restricted cash 1,576 ( 3,224 )

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

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

Cash, cash equivalents and restricted cash at end of third quarter $ 31,230 $ 35,581

September 30,

Cash and cash equivalents $ 29,891 $ 33,993

Restricted cash in other long-term assets 1,339 1,588

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

Cash, cash equivalents and restricted cash at end of third quarter $ 31,230 $ 35,581

See accompanying Notes to Consolidated Financial Statements.

8 unchanged sentences

Stock Non-controlling Interests Total

For the second quarter and first six months of 2024

For the third quarter and first nine months of 2024

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

7 unchanged sentences

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

Net earnings (loss) 32,125 32,125

Other comprehensive income 488 488

Adjustment for holdings in investment partnerships ( 29 ) ( 29 )

Balance at September 30, 2024 $ 1,138 $ 385,594 $ 637,972 $ ( 2,179 ) $ ( 420,762 ) $ — $ 601,763

For the third quarter and first nine months of 2023

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

6 unchanged sentences

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

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

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

Net earnings (loss) ( 56,514 ) ( 56,514 )

Other comprehensive loss ( 286 ) ( 286 )

Adjustment for holdings in investment partnerships ( 2,150 ) ( 2,150 )

Balance at September 30, 2023 $ 1,138 $ 385,594 $ 586,818 $ ( 3,066 ) $ ( 413,080 ) $ — $ 557,404

See accompanying Notes to Consolidated Financial Statements.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024

September 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 June 30, 2024, Mr.

As of September 30, 2024, Mr.

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

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.

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

Intercompany accounts and transactions have been eliminated in consolidation.

4 unchanged sentences

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

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

September 30, 2024 December 31, 2023

Class A Class B Class A Class B

4 unchanged sentences

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

Second Quarter First Six Months

Third Quarter First Nine Months

2024 2023 2024 2023

7 unchanged sentences

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

Investment losses for the second quarter and first six months of 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 gains for the third quarter and first nine months of 2024 were $ 4,740 and $ 3,724 , respectively.

Investment losses in the third quarter and first nine months of 2023 were $ 4,715 and $ 724 , respectively.

Investment Partnerships

17 unchanged sentences

Changes in proportionate share of Company stock held 4,420 ( 4,420 )

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

Partnership interest at September 30, 2024 $ 491,589 $ 289,998 $ 201,591

Fair Value Company

4 unchanged sentences

Changes in proportionate share of Company stock held 3,400 ( 3,400 )

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

Partnership interest at September 30, 2023 $ 445,675 $ 276,258 $ 169,417

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

September 30,

2024 December 31, 2023

3 unchanged sentences

We expect that a majority of the $ 22,880 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 Company’s proportionate share of Company stock held by investment partnerships at cost was $ 420,762 and $ 416,342 at September 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.

Second Quarter First Six Months

Third Quarter First Nine Months

2024 2023 2024 2023

7 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 six months of 2024 and 2023.

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

Investment Partnerships (continued)

4 unchanged sentences

Lion Fund Lion Fund II

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 September 30, 2024 $ 372,605 $ 382,895

Total liabilities as of September 30, 2024 $ 22,447 $ 183,055

Revenue for the first nine months of 2024 $ ( 1,940 ) $ ( 630 )

Earnings (loss) for the first nine months of 2024 $ ( 3,233 ) $ ( 9,261 )

Biglari Holdings’ ownership interest as of September 30, 2024 90.2 % 87.8 %

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 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 for the first nine months of 2023 $ 44,886 $ ( 12,172 )

Earnings (loss) for the first nine months of 2023 $ 44,208 $ ( 19,603 )

Biglari Holdings’ ownership interest as of September 30, 2023 89.4 % 87.8 %

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

1 unchanged sentence

Property and equipment is composed of the following.

September 30,

2024 December 31,

8 unchanged sentences

Property and equipment, net $ 380,622 $ 380,491

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.

Depletion expense related to oil and gas properties was $ 7,412 and $ 7,550 during the first nine months of 2024 and 2023, respectively.

The Company recorded no impairment to restaurant long-lived assets in the third quarter of 2024 and $ 752 in the third quarter of 2023.

The Company recorded an impairment to restaurant long-lived assets related to underperforming stores of $ 107 and $ 2,361 in the first nine months of 2024 and 2023, respectively.

Property and equipment held for sale of $ 773 are recorded in other assets as of December 31, 2023.

There was no property and equipment held for sale as of September 30, 2024.

During the first nine months of 2024, the Company sold former company-operated restaurants for a gain of $ 5,335 .

During the first nine months of 2023, the Company sold former company-operated restaurants for a gain of $ 5,253 and Abraxas Petroleum sold its office building with no gain or loss recorded.

Goodwill and Other Intangible Assets

4 unchanged sentences

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

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

Change in foreign exchange rates during the first nine months of 2024 7

Goodwill at September 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 by Steak n Shake for goodwill during the first six months of 2024 or 2023.

There was no impairment recorded by Steak n Shake for goodwill during the first nine 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.

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

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

Other Intangible Assets

5 unchanged sentences

15,876 7,354 23,230

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

Balance at June 30, 2024

Change in foreign exchange rates during the first nine months of 2024 — 78 78

Balance at September 30, 2024

$ 15,876 $ 7,432 $ 23,308

1 unchanged sentence

Restaurant operations revenues were as follows.

Second Quarter First Six Months

Third Quarter First Nine Months

2024 2023 2024 2023

16 unchanged sentences

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

During the second quarter of 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.

During the third quarter of 2024 and 2023, restaurant operations recognized $ 5,780 and $ 5,692 , respectively, in franchise partner fees related to rental income.

During the first nine months ended September 30, 2024 and September 30, 2023, restaurant operations recognized $ 17,265 and $ 17,030 , respectively, in franchise partner fees related to rental income.

Franchise Royalties and Fees

10 unchanged sentences

Accounts payable and accrued expenses include the following.

September 30,

2024 December 31,

10 unchanged sentences

Biglari Holdings Line of Credit

Biglari Holdings’ available line of credit is $ 30,000 .

Biglari Holdings’ line of credit dated September 13, 2022 was amended on September 13, 2024 and the available line of credit was increased to $ 35,000 .

The line of credit matures on September 13, 2026.

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

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

The balance of the line of credit was $ 9,000 on September 30, 2024.

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

Our interest rate was 7.71 % and 8.06 % on September 30, 2024 and December 31, 2023, respectively, which is based on the 30-day Secured Overnight Financing Rate plus 2.75 % and 2.73 %, respectively.

Western Sizzlin Revolver

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

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.

As of September 30, 2024 and December 31, 2023, 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 six month periods ended June 30, 2024 and 2023 follows.

2024 June 30,

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

September 30,

2024 September 30,

Balances at beginning of year:

10 unchanged sentences

Total 31,944 28,469

Balances at June 30:

Balances at September 30:

Net liabilities 15,281 14,086

1 unchanged sentence

Gross liabilities $ 15,857 $ 15,133

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.

We recorded net reductions of estimated ultimate liabilities for prior accident years of $ 4,189 and $ 3,421 in the first nine 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 27.6 % in 2024 and 20.4 % in 2023.

1 unchanged sentence

Lease obligations include the following.

Current portion of lease obligations June 30,

Current portion of lease obligations September 30,

2024 December 31,

15 unchanged sentences

Total lease cost consists of the following.

Second Quarter First Six Months

Third Quarter First Nine Months

2024 2023 2024 2023

6 unchanged sentences

Supplemental cash flow information related to leases is as follows.

First Six Months

First Nine Months

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

4 unchanged sentences

Supplemental balance sheet information related to leases is as follows.

September 30,

2024 December 31,

2 unchanged sentences

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

September 30,

Weighted-average remaining lease terms:

4 unchanged sentences

Operating leases 7.0 %

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

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

Year Operating

10 unchanged sentences

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

Second Quarter First Six Months

Third Quarter First Nine Months

2024 2023 2024 2023

3 unchanged sentences

Lease Assets and Obligations (continued)

The following table displays the Company’s future minimum rental receipts for non-cancelable leases and subleases as of June 30, 2024.

The following table displays the Company’s future minimum rental receipts for non-cancelable leases and subleases as of September 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 $ 1,304 $ 4,184

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.

In determining the quarterly provision for income taxes, the Company used an estimated annual effective tax rate for the first nine 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 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.

Income tax expense for the third quarter of 2024 was $ 11,201 compared to an income tax benefit of $ 17,502 for the third quarter of 2023.

Income tax expense for the first nine months of 2024 was $ 3,292 compared to an income tax expense of $ 3,254 for the first nine 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

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.

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.

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

June 30, 2024 December 31, 2023

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

September 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 $ 4,800 in service fees during the first six months of 2024 and $ 4,200 during the first six months of 2023.

The Company paid Biglari Enterprises $ 7,200 in service fees during the first nine months of 2024 and $ 6,300 during the first nine months of 2023.

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

5 unchanged sentences

Biglari will receive 25 % of any incremental book value created above the high-water mark plus the hurdle rate.

The Company accrued $ 2,050 in incentive fees in the first nine months of 2024 and $ 3,700 in the first nine months of 2023.

Business Segment Reporting

9 unchanged sentences

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

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

Second Quarter First Six Months

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

Third Quarter First Nine Months

2024 2023 2024 2023

17 unchanged sentences

Earnings (Losses) Before Income Taxes

Second Quarter First Six Months

Third Quarter First Nine Months

2024 2023 2024 2023

30 unchanged sentences

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

As of June 30, 2024, Mr.

As of September 30, 2024, Mr.

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

2 unchanged sentences

Amounts are recorded after deducting income taxes.

Second Quarter First Six Months

Third Quarter First Nine Months

2024 2023 2024 2023

11 unchanged sentences

Net earnings (loss) 32,125 (56,514) 6,514 10,899

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

Earnings attributable to noncontrolling interest — — — 591

Net earnings (loss) attributable to Biglari Holdings Inc.

1 unchanged sentence

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.

Our restaurant businesses, which include Steak n Shake and Western Sizzlin, comprise 468 company-operated and franchise restaurants as of September 30, 2024.

Steak n Shake Western Sizzlin

7 unchanged sentences

Net restaurants opened (closed) (9) — (12) — (3) (24)

Total stores as of June 30, 2024

Total stores as of September 30, 2024

143 177 116 3 29 468

3 unchanged sentences

Net restaurants opened (closed) (12) (1) (19) — (3) (35)

Total stores as of June 30, 2023

Total stores as of September 30, 2023

159 181 134 3 33 510

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

As of September 30, 2024, 11 of the 143 company-operated Steak n Shake stores were closed.

Steak n Shake plans to sell or lease 6 of the 11 locations and refranchise the balance.

1 unchanged sentence

Restaurant operations are summarized below.

Second Quarter First Six Months

Third Quarter First Nine Months

2024 2023 2024 2023

22 unchanged sentences

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.

Net sales for the third quarter and first nine months of 2024 were $39,660 and $119,210, respectively, representing an increase of $465 or 1.2% and $3,597 or 3.1%, compared to the third quarter and first nine months of 2023, respectively.

The increase in net sales was primarily due to an increase in Steak n Shake’s same-store sales of 5.4% during the third 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.

1 unchanged sentence

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.

Our franchise partner fees were $17,157 during the third quarter of 2024, as compared to $17,622 during the third quarter of 2023.

Franchise partner fees were $53,064 and $54,604 during the first nine months of 2024 and 2023, respectively.

As of September 30, 2024 and September 30, 2023, there were 177 and 181 franchise partner units, respectively.

Included in franchise partner fees were $5,780 and $5,692 of rental income during the third quarter of 2024 and 2023, respectively, and $17,265 and $17,030 during the first nine 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.

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

The franchise royalties and fees generated by the traditional franchising business were $3,442 during the third quarter of 2024, as compared to $4,073 during the third quarter of 2023.

Franchise royalties and fees during the first nine months of 2024 were $10,534 as compared to $12,456 during the first nine months of 2023.

There were 116 Steak n Shake traditional units open on September 30, 2024, as compared to 134 units open on September 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.

The cost of food at company-operated units during the third quarter of 2024 was $12,218 or 30.8% of net sales, as compared to $11,888 or 30.3% of net sales during the third quarter of 2023.

The cost of food at company-operated units during the first nine months of 2024 was $35,549 or 29.8% of net sales, as compared to $34,038 or 29.4% of net sales during the first nine 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 at company-operated restaurants during the third quarter of 2024 were $13,158 or 33.2% of net sales, as compared to $12,192 or 31.1% of net sales in the third quarter of 2023.

Labor costs at company-operated restaurants during the first nine months of 2024 were $38,694 or 32.5% of net sales, as compared to $36,077 or 31.2% 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.

General and administrative expenses during the third quarter of 2024 were $10,355 or 16.6% of total revenue, as compared to $10,720 or 17.3% of total revenue in the third quarter of 2023.

General and administrative expenses during the first nine months of 2024 were $35,101 or 18.6% of total revenue, as compared to $31,973 or 17.1% of total revenue in the first nine 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.

The Company recorded no impairment charges in the third quarter of 2024 and $752 of impairment charges in the third quarter of 2023.

The Company recorded impairment charges of $107 and $2,381 in the first nine months of 2024 and 2023, respectively, related to underperforming stores.

Interest on obligations under leases was $4,016 during 2024 versus $3,870 during 2023.

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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.

During 2024, Steak n Shake sold five properties for a gain of $4,383 and sold six properties for a gain of $5,253 during 2023.

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

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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

Third Quarter First Nine Months

2024 2023 2024 2023

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Our business units are operated under separate local management.

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

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

Underwriting results of our insurance operations are summarized below.

Second Quarter First Six Months

Third Quarter First Nine Months

2024 2023 2024 2023

7 unchanged sentences

Earnings of our insurance operations are summarized below.

Second Quarter First Six Months

Third Quarter First Nine Months

2024 2023 2024 2023

Premiums written $ 16,890 $ 15,155 $ 50,265 $ 47,715

Premiums earned $ 16,675 $ 15,160 $ 48,888 $ 45,895

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A summary of First Guard’s underwriting results follows.

Second Quarter First Six Months

Third Quarter First Nine Months

2024 2023 2024 2023

Amount % Amount % Amount % Amount %

Premiums written $ 9,394 $ 9,351 $ 28,198 $ 27,465

Premiums earned $ 9,394 100.0 % $ 9,351 100.0 % $ 28,198 100.0 % $ 27,465 100.0 %

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Pre-tax underwriting gain $ 1,366 $ 2,362 $ 3,497 $ 7,379

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).

First Guard produced an underwriting gain in the third quarter and first nine months of 2024.

Its underwriting profitability declined in 2024 as compared to 2023 because of a higher ratio of losses and loss adjustment expenses to premiums earned.

Our periodic underwriting earnings are subject to considerable volatility from significant weather-related loss events.

It is the nature of the insurance business to experience volatility in underwriting performance.

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

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A summary of Southern Pioneer’s underwriting results follows.

Second Quarter First Six Months

Third Quarter First Nine Months

2024 2023 2024 2023

Amount % Amount % Amount % Amount %

Premiums written $ 7,496 $ 5,804 $ 22,067 $ 20,250

Premiums earned $ 7,281 100.0 % $ 5,809 100.0 % $ 20,690 100.0 % $ 18,430 100.0 %

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Pre-tax underwriting gain (loss) $ 912 $ (166) $ 186 $ (728)

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.

Premiums written increased $1,817 (9.0%) in 2024 compared to 2023.

Southern Pioneer’s ratio of losses and loss adjustment expenses to premiums earned was 47.9% during the third quarter of 2024 as compared to 60.5% during the third quarter of 2023 and 59.9% during the first nine months of 2024 as compared to 59.6% during the first nine months of 2023.

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

Second Quarter First Six Months

Third Quarter First Nine Months

2024 2023 2024 2023

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Southern Pioneer 363 357 1,130 876

Biglari Reinsurance 18 — 18 —

Pre-tax investment income 816 832 2,686 2,169

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

Second Quarter First Six Months

Third Quarter First Nine Months

2024 2023 2024 2023

5 unchanged sentences

Earnings before income taxes 712 18,953 19,529 23,946

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

Income tax expense (benefit) 113 4,322 4,412 5,495

Contribution to net earnings $ 599 $ 14,631 $ 15,117 $ 18,451

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.

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

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;

During the first nine months of 2024, Abraxas Petroleum recorded a gain of $16,700 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.

During the third quarter of 2023, Abraxas Petroleum entered into a similar royalty-based arrangement on its undeveloped properties, which began producing in the third quarter of 2024.

Abraxas Petroleum

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Earnings for Abraxas Petroleum are summarized below.

Second Quarter First Six Months

Third Quarter First Nine Months

2024 2023 2024 2023

10 unchanged sentences

Earnings for Southern Oil are summarized below.

Second Quarter First Six Months

Third Quarter First Nine Months

2024 2023 2024 2023

5 unchanged sentences

Income tax expense (benefit) (37) 185 (70) 656

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

Contribution to net earnings $ 53 $ 778 $ 102 $ 2,246

Brand Licensing

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Earnings of operations are summarized below.

Second Quarter First Six Months

Third Quarter First Nine Months

2024 2023 2024 2023

5 unchanged sentences

Contribution to net earnings (loss) $ (194) $ (179) $ (652) $ 68

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.

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

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.

Investment gains net of tax for the third quarter of 2024 were $3,706 as compared to investment losses net of tax for the third quarter of 2023 of $3,710.

Investment gains net of tax for the first nine months of 2024 were $2,879 as compared to investment losses net of tax for the first nine months of 2023 of $569.

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

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

Second Quarter First Six Months

Third Quarter First Nine Months

2024 2023 2024 2023

2 unchanged sentences

Contribution to net earnings (loss) $ 26,447 $ (68,377) $ (17,153) $ (17,847)

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.

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

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

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

5 unchanged sentences

The Company’s interest expense is summarized below.

Second Quarter First Six Months

Third Quarter First Nine Months

2024 2023 2024 2023

2 unchanged sentences

Interest expense net of tax $ 210 $ 202 $ 242 $ 362

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.

Biglari Holdings’ line of credit dated September 13, 2022 was amended on September 13, 2024 and the available line of credit was increased to an aggregate principal amount of up to $35,000.

The balance of the line of credit was $9,000 on September 30, 2024.

There was no balance on the line of credit on 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.

Corporate and other net losses during the third quarter of 2024 increased as compared to the same period in 2023 because of higher legal and professional expenses.

Corporate and other net losses during the first nine months of 2024 decreased as compared to the same period in 2023 primarily due to lower incentive fees accrued.

Income tax expense for the third quarter of 2024 was $11,201 compared to income tax benefit of $17,502 for the third quarter of 2023.

Income tax expense for the first nine months of 2024 was $3,292 compared to income tax expense of $3,254 for the first nine 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.

September 30,

2024 December 31, 2023

7 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements