What changed in this filing

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Item 1. Financial Statements

2025-05-09 compared with 2024-11-08 · 194 added, 493 removed, 405 unchanged (63% of the section changed)

3 unchanged sentences

(dollars in thousands)

September 30,

2025 December 31,

18 unchanged sentences

Current portion of lease obligations 15,071 14,449

Line of credit 35,000 35,000

Total current liabilities 150,314 147,316

18 unchanged sentences

(dollars in thousands except per share amounts)

Third Quarter First Nine Months

2024 2023 2024 2023

(Unaudited) (Unaudited)

First Quarter

Restaurant operations $ 64,349 $ 61,996

13 unchanged sentences

Interest expense on leases 1,333 1,314

Interest expense on borrowings 275 262 317 469

Interest expense on debt 900 —

Total costs and expenses 85,041 83,754

1 unchanged sentence

Investment partnership gains (losses) ( 49,592 ) 21,985

Total other income (expenses) 40,054 ( 94,314 ) ( 18,867 ) ( 25,231 )

Total other income (expense) ( 51,177 ) 23,698

Earnings (loss) before income taxes ( 41,183 ) 29,395

1 unchanged sentence

Net earnings (loss) $ ( 33,275 ) $ 22,579

Earnings attributable to noncontrolling interest — — — 591

Net earnings (loss) attributable to Biglari Holdings Inc.

shareholders $ 32,125 $ ( 56,514 ) $ 6,514 $ 10,308

Net earnings (loss) per average equivalent Class A share* $ ( 126.40 ) $ 79.56

*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.

* Net earnings (loss) per average equivalent Class B share outstanding are one-fifth of the average equivalent Class A share or $( 25.28 ) for the first quarter of 2025 and $ 15.91 for the first quarter of 2024.

See accompanying Notes to Consolidated Financial Statements.

2 unchanged sentences

(dollars in thousands)

Third Quarter First Nine Months

2024 2023 2024 2023

(Unaudited) (Unaudited)

First Quarter

Net earnings (loss) $ ( 33,275 ) $ 22,579

Foreign currency translation 470 ( 31 )

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

Comprehensive income attributable to noncontrolling interests — — — 591

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

shareholders $ 32,613 $ ( 56,800 ) $ 6,853 $ 10,032

Total comprehensive income (loss) $ ( 32,805 ) $ 22,548

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(dollars in thousands)

Stock Additional Paid-In

Capital Retained

Earnings Accumulated

Comprehensive

Income (Loss) Treasury

For the first quarter of 2025

Balance at December 31, 2024 $ 1,138 $ 385,594 $ 627,699 $ ( 2,872 ) $ ( 438,598 ) $ 572,961

Net earnings (loss) ( 33,275 ) ( 33,275 )

Other comprehensive income (loss) 470 470

Adjustment for holdings in investment partnerships ( 320 ) ( 320 )

Balance at March 31, 2025 $ 1,138 $ 385,594 $ 594,424 $ ( 2,402 ) $ ( 438,918 ) $ 539,836

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

See accompanying Notes to Consolidated Financial Statements.

2 unchanged sentences

(dollars in thousands)

First Nine Months

First Quarter

Operating activities

Net earnings $ 6,514 $ 10,899

Adjustments to reconcile net earnings to operating cash flows:

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

Net earnings (loss) $ ( 33,275 ) $ 22,579

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

Depreciation and amortization 10,257 10,053

Provision for deferred income taxes ( 9,156 ) 3,877

1 unchanged sentence

Gains on sale of assets ( 9,060 ) ( 1,431 )

Investment and investment partnership gains and losses 18,867 25,231

Investment and investment partnerships (gains) losses 51,177 ( 23,698 )

Distributions from investment partnerships — 1,000

Changes in receivables, inventories and other assets ( 2,503 ) 5,441

Changes in receivables and inventories 1,606 ( 2,249 )

Changes in accounts payable and accrued expenses 4,246 8,887

3 unchanged sentences

Proceeds from property and equipment disposals 9,559 920

Purchases of noncontrolling interests — ( 5,387 )

Purchases of interests in limited partnerships ( 17,320 ) ( 3,975 )

3 unchanged sentences

Financing activities

Proceeds from line of credit 16,050 31,600

Payments on line of credit ( 9,600 ) —

Proceeds from line of credit 13,000 —

Principal payments on direct financing lease obligations ( 1,398 ) ( 1,403 )

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

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

Net cash provided by (used in) financing activities 2,002 ( 1,403 )

Effects of foreign currency exchange rate changes 40 ( 10 )

Increase (decrease) in cash, cash equivalents and restricted cash ( 2,057 ) 6,470

Cash, cash equivalents and restricted cash at beginning of year 31,432 29,654

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

September 30,

Cash, cash equivalents and restricted cash at end of first quarter $ 29,375 $ 36,124

First Quarter

Cash and cash equivalents $ 28,664 $ 34,536

Restricted cash in other long-term assets 711 1,588

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

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 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

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

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

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

Other comprehensive income 332 332

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

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

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

Other comprehensive loss ( 322 ) ( 322 )

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

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

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

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

Cash, cash equivalents and restricted cash at end of first quarter $ 29,375 $ 36,124

See accompanying Notes to Consolidated Financial Statements.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

March 31, 2025

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

8 unchanged sentences

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.

is a holding company owning subsidiaries engaged in a number of diverse business activities, including property and casualty insurance and reinsurance, licensing and media, restaurants, and oil and gas.

The Company’s largest operating subsidiaries are involved in the franchising and operating of restaurants.

3 unchanged sentences

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

As of September 30, 2024, Mr.

As of March 31, 2025, Mr.

Biglari beneficially owns shares of the Company that represent approximately 74.3 % 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.

Earnings Per Share (continued)

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

September 30, 2024 December 31, 2023

The following table presents shares authorized, issued, and outstanding on March 31, 2025 and December 31, 2024.

March 31, 2025 December 31, 2024

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.

Third Quarter First Nine Months

2024 2023 2024 2023

March 31, 2025 March 31, 2024

Equivalent Class A common stock outstanding 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 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 losses for the first quarter of 2025 were $ 1,585 and investment gains for the first quarter of 2024 were $ 1,713 .

Investment Partnerships

9 unchanged sentences

is solely owned by Mr.

Investment Partnerships (continued)

Under the terms of their partnership agreements, each contribution made by the Company to the investment partnerships is subject to a rolling five-year lock-up period.

The lock-up period can be waived by the general partner in its sole discretion.

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 320 ( 320 )

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

Partnership interest at March 31, 2025 $ 558,147 $ 389,012 $ 169,135

Investment Partnerships (continued)

Fair Value Company

4 unchanged sentences

Changes in proportionate share of Company stock held 3,306 ( 3,306 )

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

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

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

September 30,

2025 December 31, 2024

2 unchanged sentences

Carrying value of investment partnerships net of deferred taxes $ 159,571 $ 184,472

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 $ 420,762 and $ 416,342 at September 30, 2024 and December 31, 2023, respectively.

We expect that a majority of the $ 9,564 and $ 17,255 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 $ 438,918 and $ 438,598 as of March 31, 2025, and December 31, 2024, 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.

Third Quarter First Nine Months

2024 2023 2024 2023

First Quarter

Gains (losses) from investment partnerships $ ( 49,592 ) $ 21,985

Tax expense (benefit) ( 10,166 ) 4,837

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

Contribution to net earnings $ ( 39,426 ) $ 17,148

On December 31 of each year, the general partner of the investment partnerships, Biglari Capital Corp., will earn an incentive reallocation fee for the Company’s investments equal to 25 % of the net profits above an annual hurdle rate of 6 % over the previous high-water mark.

3 unchanged sentences

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

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

There were no incentive reallocations accrued during the first quarters of 2025 and 2024.

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 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 March 31, 2025 $ 481,961 $ 326,220

Total liabilities as of March 31, 2025 $ 18,613 $ 182,666

Revenue for the first quarter of 2025 $ ( 84,132 ) $ ( 40,875 )

Earnings for the first quarter of 2025 $ ( 84,439 ) $ ( 43,373 )

Biglari Holdings’ ownership interest as of March 31, 2025 91.1 % 89.5 %

Total assets as of December 31, 2024 $ 567,387 $ 367,630

Total liabilities as of December 31, 2024 $ 20,609 $ 188,202

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 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 %

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,

2025 December 31,

8 unchanged sentences

Property and equipment, net $ 370,394 $ 376,155

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.

Depletion expense related to oil and gas properties was $ 3,058 and $ 2,568 during the first quarter of 2025 and 2024, respectively.

The Company recorded no impairment to restaurant long-lived assets in the first quarter of 2025 and $ 107 in the first quarter of 2024 related to underperforming stores.

We did not record any impairments to our oil and gas assets during the first quarter of 2025 and 2024.

However, if commodity prices fall below current levels, we may be required to record impairments in future periods and such impairments could be material.

Further, if commodity prices decrease, our production, proved reserves, and cash flows will be adversely impacted.

Abraxas Petroleum recorded gains of $ 9,323 and $ 481 during the first quarter of 2025 and 2024, respectively, as result of selling undeveloped reserves.

Abraxas may receive future royalties for each of these transactions as the reserves are developed by the respective unaffiliated parties.

Property and Equipment (continued)

Property and equipment held for sale of $ 2,428 and $ 1,081 are recorded in other current assets as of March 31, 2025 and December 31, 2024, respectively.

The assets classified as held for sale include properties which were previously company-operated restaurants.

During the first quarter of 2025 and 2024, the Company recognized net gains of $ 262 and $ 767 , respectively, in connection with property sales, lease terminations, and asset disposals which are included in selling, general and administrative expenses in the consolidated statements of earnings.

Goodwill and Other Intangible Assets

3 unchanged sentences

Goodwill $ 53,796

Impairments prior to 2024 ( 300 )

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

Accumulated impairment losses ( 1,300 )

Change in foreign exchange rates during the first quarter of 2025 23

Goodwill at March 31, 2025

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 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 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.

There was no impairment recorded for goodwill during the first quarters of 2025 or 2024.

Other Intangible Assets

3 unchanged sentences

Intangibles $ 15,876 $ 10,692 $ 26,568

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

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

$ 15,876 $ 6,944 $ 22,820

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

Balance at September 30, 2024

Change in foreign exchange rates during the first quarter of 2025 — 274 274

Balance at March 31, 2025

$ 15,876 $ 7,218 $ 23,094

1 unchanged sentence

Restaurant operations revenues were as follows.

Third Quarter First Nine Months

2024 2023 2024 2023

First Quarter

Net sales $ 41,615 $ 38,735

3 unchanged sentences

$ 64,349 $ 61,996

Restaurant Operations Revenues (continued)

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

9 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 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.

During the first quarter of 2025 and 2024, restaurant operations recognized $ 5,553 and $ 5,705 , 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,

2025 December 31,

6 unchanged sentences

Oil and gas payable 1,996 1,912

Professional fees 2,155 3,052

Due to broker 3,669 3,517

Other 665 1,189

1 unchanged sentence

Lines of Credit

Biglari Holdings Line of Credit

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 .

Biglari Holdings Lines of Credit

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

The line of credit matures on September 13, 2026.

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

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.

There was a $ 35,000 balance on the line of credit on March 31, 2025 and December 31, 2024.

Our interest rate was 7.1 % on March 31, 2025 and December 31, 2024.

On November 8, 2024, Biglari Holdings entered into a line of credit in an aggregate principal amount of up to $ 75,000 .

The line of credit will be available on a revolving basis until November 7, 2027.

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

There was a $ 13,400 and $ 10,000 balance on the line of credit on March 31, 2025 and December 31, 2024, respectively.

Our interest rate was 7.5 % and 7.8 % on March 31, 2025 and December 31, 2024, respectively.

Western Sizzlin Revolver

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

As of September 30, 2024 and December 31, 2023, Western Sizzlin had no debt outstanding under its revolver.

Unpaid Losses and Loss Adjustment Expenses

As of March 31, 2025 and December 31, 2024, Western Sizzlin had no debt outstanding under its revolver.

Unpaid Loss 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 nine month periods ended September 30, 2024 and 2023 follows.

September 30,

2024 September 30,

A reconciliation of the changes in claim liabilities, net of reinsurance, for each of the three-month periods ended March 31, 2025 and 2024 follows.

March 31, March 31,

Balances at beginning of year:

10 unchanged sentences

Total 11,273 10,033

Balances at September 30:

Balances at March 31:

Net liabilities 17,982 16,013

1 unchanged sentence

Gross liabilities $ 18,655 $ 16,700

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.

We recorded net increases of estimated ultimate liabilities for prior accident years of $ 189 in the first quarter of 2025 and net reductions of estimated ultimate liabilities for prior accident years of $ 3,319 in the first quarter of 2024, which produced corresponding changes in incurred losses and loss adjustment expenses in those periods.

These changes, as a percentage of the net liabilities at the beginning of each year, were 1.1 % in 2025 and 21.9 % in 2024.

Lease Assets and Obligations

Lease obligations include the following.

Current portion of lease obligations September 30,

Current portion of lease obligations March 31,

2025 December 31,

8 unchanged sentences

Total long-term lease obligations $ 89,361 $ 90,739

Lease Assets and Obligations (continued)

Nature of Leases

5 unchanged sentences

Total lease cost consists of the following.

Third Quarter First Nine Months

2024 2023 2024 2023

First Quarter

Finance lease costs:

5 unchanged sentences

Supplemental cash flow information related to leases is as follows.

First Nine Months

First Quarter

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

2 unchanged sentences

Operating cash flows from operating leases $ 2,728 $ 2,666

Lease Assets and Obligations (continued)

Supplemental balance sheet information related to leases is as follows.

September 30,

2025 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 September 30, 2024 are as follows.

Lease Assets and Obligations (continued)

Maturities of lease liabilities as of March 31, 2025 are as follows.

Year Operating

9 unchanged sentences

Total lease liabilities $ 35,682 $ 4,259

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

Third Quarter First Nine Months

2024 2023 2024 2023

The components of lease income are as follows.

First Quarter

Operating lease income $ 3,932 $ 4,181

1 unchanged sentence

Total lease income $ 5,832 $ 5,980

Lease Assets and Obligations (continued)

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

The following table displays the Company’s future minimum rental receipts for non-cancelable leases and subleases as of March 31, 2025.

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

4 unchanged sentences

Total future minimum receipts $ 973 $ 6,485

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.

In determining the quarterly provision for income taxes, the Company used an estimated annual effective tax rate for the first quarter of 2025 and 2024.

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 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.

Income tax benefit for the first quarter of 2025 was $ 7,908 compared to income tax expense of $ 6,816 for the first quarter of 2024.

The variance in income taxes between 2025 and 2024 is primarily attributable to taxes on income generated by the investment partnerships.

Investment partnership pre-tax losses were $ 49,592 during the first quarter of 2025 compared to pre-tax gains of $ 21,985 during the first quarter of 2024.

Commitments and Contingencies

13 unchanged sentences

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)

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

7 unchanged sentences

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

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

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

September 30, 2024 December 31, 2023

Bonds may be classified as Level l or Level 2 of the fair value hierarchy.

Fair Value of Financial Assets (continued)

As of March 31, 2025, and December 31, 2024, the fair values of financial assets were as follows.

March 31, 2025 December 31, 2024

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 $ 7,200 in service fees during the first nine months of 2024 and $ 6,300 during the first nine months of 2023.

The Company paid Biglari Enterprises $ 2,850 and $ 2,400 in service fees during the first quarter of 2025 and 2024, respectively.

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

Our reportable business segments are organized in a manner that reflects how management views those business activities.

Biglari Holdings’ diverse businesses are managed on an unusually decentralized basis.

Our restaurant operations include Steak n Shake and Western Sizzlin.

Our insurance operations include First Guard and Southern Pioneer.

Our insurance operations include First Guard, Southern Pioneer, and Biglari Reinsurance.

Our oil and gas operations include Southern Oil and Abraxas Petroleum.

The Company also reports segment information for Maxim.

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

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

We assess and measure segment operating results based on segment earnings as disclosed below.

Segment earnings from operations are neither necessarily indicative of cash available to fund cash requirements, nor synonymous with cash flow from operations.

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 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

Operating Businesses:

Restaurant Operations:

Steak n Shake $ 59,821 $ 59,180 $ 180,886 $ 179,244

Western Sizzlin 2,563 2,706 7,969 8,262

Total Restaurant Operations 62,384 61,886 188,855 187,506

Insurance Operations:

First Guard 9,394 9,351 28,198 27,465

Southern Pioneer 7,281 5,809 20,690 18,430

Investment income and other 1,572 1,464 4,786 4,505

Total Insurance Operations 18,247 16,624 53,674 50,400

Oil and Gas Operations:

Abraxas Petroleum 6,019 8,310 16,879 21,493

Southern Oil 3,555 3,849 10,876 13,630

Total Oil and Gas Operations 9,574 12,159 27,755 35,123

Maxim 202 268 715 1,624

$ 90,407 $ 90,937 $ 270,999 $ 274,653

Other business activities not specifically identified with reportable business segments are presented under corporate and other.

We report our earnings from investment partnerships separately.

The Company’s chief operating decision maker is the Chief Executive Officer who is ultimately responsible for significant capital allocation decisions, evaluating operating performance and selecting the chief executive to head each of the operating segments.

The cost and expense information provided is based on the information regularly provided to the chief operating decision maker.

Given the varied operating segments and differences in revenue streams and cost structures, there are wide variances in the form, content, and levels of such expense information significant to the business.

With respect to insurance underwriting, the chief operating decision maker considers pre-tax underwriting earnings.

Typically, there are no budgeted or forecasted premiums.

For most non-insurance businesses, pre-tax earnings are considered in allocating resources and capital.

A disaggregation of our consolidated data for the first quarters of 2025 and 2024 is presented in the tables which follow.

Business Segment Reporting (continued)

Earnings (Losses) Before Income Taxes

Third Quarter First Nine Months

2024 2023 2024 2023

Operating Businesses:

Restaurant Operations:

Steak n Shake $ 6,248 $ 3,358 $ 15,994 $ 19,317

Western Sizzlin 265 397 1,162 1,462

Total Restaurant Operations 6,513 3,755 17,156 20,779

Insurance Operations:

Underwriting:

First Guard 1,366 2,362 3,497 7,378

Southern Pioneer 912 ( 166 ) 186 ( 728 )

Investment income and other 845 1,155 3,536 3,456

Total Insurance Operations 3,123 3,351 7,219 10,106

Oil and Gas Operations:

Abraxas Petroleum 696 17,990 19,497 21,044

Southern Oil 16 963 32 2,902

Total Oil and Gas Operations 712 18,953 19,529 23,946

Maxim ( 267 ) ( 239 ) ( 876 ) 91

Interest expense not allocated to segments ( 275 ) ( 262 ) ( 317 ) ( 469 )

Total Operating Businesses 9,806 25,558 42,711 54,453

Goodwill impairment — — ( 1,000 ) —

Corporate and other ( 6,534 ) ( 5,260 ) ( 13,038 ) ( 15,069 )

Investment gains (losses) 4,740 ( 4,715 ) 3,724 ( 724 )

Investment partnership gains (losses) 35,314 ( 89,599 ) ( 22,591 ) ( 24,507 )

$ 43,326 $ ( 74,016 ) $ 9,806 $ 14,153

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 September 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.

Third Quarter First Nine Months

2024 2023 2024 2023

Operating businesses:

Restaurant $ 4,870 $ 3,395 $ 12,587 $ 16,170

Insurance 2,455 2,674 5,647 7,975

Oil and gas 599 14,631 15,117 18,451

Brand licensing (194) (179) (652) 68

Interest expense (210) (202) (242) (362)

Total operating businesses 7,520 20,319 32,457 42,302

Goodwill impairment — — (1,000) —

Corporate and other (5,548) (4,746) (10,669) (12,987)

Investment partnership gains (losses) 26,447 (68,377) (17,153) (17,847)

Investment gains (losses) 3,706 (3,710) 2,879 (569)

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

Earnings attributable to noncontrolling interest — — — 591

Net earnings (loss) attributable to Biglari Holdings Inc.

shareholders $ 32,125 $ (56,514) $ 6,514 $ 10,308

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 468 company-operated and franchise restaurants as of September 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 4 (4) — — — —

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

Total stores as of September 30, 2024

143 177 116 3 29 468

Total stores as of December 31, 2022

177 175 154 3 36 545

Corporate stores transitioned (6) 7 (1) — — —

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

Total stores as of September 30, 2023

159 181 134 3 33 510

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.

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

Restaurant operations are summarized below.

Third Quarter First Nine Months

2024 2023 2024 2023

Net sales $ 39,660 $ 39,195 $ 119,210 $ 115,613

Franchise partner fees 17,157 17,622 53,064 54,604

Franchise royalties and fees 3,442 4,073 10,534 12,456

Other revenue 2,125 996 6,047 4,833

Total revenue 62,384 61,886 188,855 187,506

Restaurant cost of sales

First Quarter

Steak n Shake Western Sizzlin Total Restaurants

Revenue $ 61,916 $ 2,433 $ 64,349

Cost and expenses:

Cost of food 11,612 852 12,464

1 unchanged sentence

Occupancy and other 12,482 706 13,188

Total cost of sales 36,212 36,789 107,519 104,455

Selling, general and administrative 15,415 39 15,454

General and administrative 10,355 16.6 % 10,720 17.3 % 35,101 18.6 % 31,973 17.1 %

Marketing 3,182 5.1 % 2,629 4.2 % 8,984 4.8 % 8,876 4.7 %

Other expenses (income) (1,978) (3.2) % (825) (1.3) % (4,420) (2.3) % (5,126) (2.7) %

Total selling, general and administrative 11,559 18.5 % 12,524 20.2 % 39,665 21.0 % 35,723 19.1 %

Impairments — — % 752 1.2 % 107 0.1 % 2,381 1.3 %

Depreciation and amortization 6,747 10.8 % 6,804 11.0 % 20,392 10.8 % 20,298 10.8 %

Interest on finance leases and obligations 1,353 1,262 4,016 3,870

Depreciation, amortization and impairment 6,471 19 6,490

Total costs and expenses 58,828 2,207 61,035

Earnings before income taxes $ 3,088 $ 226 $ 3,314

Income tax expense 1,643 360 4,569 4,609

Contribution to net earnings $ 4,870 $ 3,395 $ 12,587 $ 16,170

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 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.

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 $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 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 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 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 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 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.

Other income was $4,420 during 2024 versus $5,126 during 2023.

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

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)

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.

Third Quarter First Nine Months

2024 2023 2024 2023

Net sales and other $ 82,553 $ 81,780 $ 246,811 $ 242,741

Restaurant cost of sales

First Quarter

Steak n Shake Western Sizzlin Total Restaurants

Revenue $ 59,354 $ 2,642 $ 61,996

Cost and expenses:

Cost of food 10,113 861 10,974

1 unchanged sentence

Occupancy and other 11,695 637 12,332

Total cost of sales $ 65,109 $ 62,387 $ 191,130 $ 181,453

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 Biglari Reinsurance, First Guard, and Southern Pioneer.

Underwriting results of our insurance operations are summarized below.

Third Quarter First Nine Months

2024 2023 2024 2023

Underwriting gain attributable to:

First Guard $ 1,366 $ 2,362 $ 3,497 $ 7,379

Southern Pioneer 912 (166) 186 (728)

Pre-tax underwriting gain 2,278 2,196 3,683 6,651

Income tax expense 478 461 773 1,397

Net underwriting gain $ 1,800 $ 1,735 $ 2,910 $ 5,254

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

Earnings of our insurance operations are summarized below.

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

Insurance losses 9,489 8,783 31,329 25,751

Underwriting expenses 4,908 4,181 13,876 13,493

Pre-tax underwriting gain 2,278 2,196 3,683 6,651

Other income and expenses

Investment income 816 832 2,686 2,169

Other income (expenses) 29 323 850 1,286

Total other income 845 1,155 3,536 3,455

Selling, general and administrative 14,687 ( 246 ) 14,441

Depreciation, amortization and impairment 6,925 17 6,942

Total costs and expenses 55,117 2,001 57,118

Earnings before income taxes $ 4,237 $ 641 $ 4,878

Income tax expense 668 677 1,572 2,131

Contribution to net earnings $ 2,455 $ 2,674 $ 5,647 $ 7,975

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.

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 %

First Quarter

First Guard Southern Pioneer Total Underwriting Investment Income Other Total Insurance

Revenue $ 9,209 $ 8,556 $ 17,765 $ 837 $ 747 $ 19,349

Cost and expenses:

Insurance losses 6,282 5,723 12,005 — — 12,005

Underwriting expenses 1,712 3,335 5,047 — — 5,047

Total losses and expenses 8,028 85.5 % 6,989 74.7 % 24,701 87.6 % 20,086 73.2 %

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

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)

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.

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 %

Other segment items — — — — 760 760

Total costs and expenses 7,994 9,058 17,052 — 760 17,812

Earnings before income taxes $ 1,215 $ ( 502 ) $ 713 $ 837 $ ( 13 ) $ 1,537

Business Segment Reporting (continued)

First Quarter

First Guard Southern Pioneer Total Underwriting Investment Income Other Total Insurance

Revenue $ 9,310 $ 6,612 $ 15,922 $ 915 $ 896 $ 17,733

Cost and expenses:

Insurance losses 6,775 4,103 10,878 — — 10,878

Underwriting expenses 1,735 2,450 4,185 — — 4,185

Total losses and expenses 6,369 87.5 % 5,975 102.8 % 20,504 99.1 % 19,158 103.9 %

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

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.

Third Quarter First Nine Months

2024 2023 2024 2023

Interest, dividends and other investment income:

First Guard $ 435 $ 475 $ 1,538 $ 1,293

Southern Pioneer 363 357 1,130 876

Biglari Reinsurance 18 — 18 —

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

Income tax expense 171 174 564 455

Net investment income $ 645 $ 658 $ 2,122 $ 1,714

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.

Third Quarter First Nine Months

2024 2023 2024 2023

Oil and gas revenues $ 9,574 $ 12,159 $ 27,755 $ 35,123

Oil and gas production costs 4,425 3,771 13,206 12,754

Depreciation, depletion and accretion 3,402 2,404 8,072 8,155

Gain on sale of properties (54) (13,563) (16,700) (13,563)

General and administrative expenses 1,089 594 3,648 3,831

Other segment items — — — — 424 424

Total costs and expenses 8,510 6,553 15,063 — 424 15,487

Earnings before income taxes $ 800 $ 59 $ 859 $ 915 $ 472 $ 2,246

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.

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

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, which began producing in the third quarter of 2024.

Abraxas Petroleum

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

Earnings for Abraxas Petroleum are summarized below.

Third Quarter First Nine Months

2024 2023 2024 2023

Oil and gas revenues $ 6,019 $ 8,310 $ 16,879 $ 21,493

Oil and gas production costs 2,377 2,061 7,462 6,836

Other segment items include general and administrative costs, depreciation, and other income.

Oil and Gas First Quarter

Abraxas Petroleum Southern Oil Total

Revenue $ 5,890 $ 4,040 $ 9,930

Cost and expenses:

Production costs 2,446 1,600 4,046

Depreciation, depletion and accretion 1,933 1,323 3,256

Gain on sale of properties (54) (13,563) (16,700) (13,563)

General and administrative expenses 713 172 2,005 2,127

General and administrative 649 654 1,303

Total costs and expenses 5,028 3,577 8,605

Gains on sales of properties 9,323 — 9,323

Earnings before income taxes $ 10,185 $ 463 $ 10,648

Income tax expense 150 4,137 4,482 4,839

Contribution to net earnings $ 546 $ 13,853 $ 15,015 $ 16,205

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.

Third Quarter First Nine Months

2024 2023 2024 2023

Oil and gas revenues $ 3,555 $ 3,849 $ 10,876 $ 13,630

Oil and gas production costs 2,048 1,710 5,744 5,918

First Quarter

Abraxas Petroleum Southern Oil Total

Revenue $ 5,868 $ 3,642 $ 9,510

Cost and expenses:

Production costs 2,819 1,680 4,499

Depreciation, depletion and accretion 1,547 1,245 2,792

General and administrative expenses 376 422 1,643 1,704

Earnings (loss) before income taxes 16 963 32 2,902

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

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

Brand Licensing

Maxim’s business lies principally in licensing and media.

Earnings of operations are summarized below.

Third Quarter First Nine Months

2024 2023 2024 2023

Licensing and media revenue $ 202 $ 268 $ 715 $ 1,624

Licensing and media costs 432 476 1,458 1,427

General and administrative expenses 37 31 133 106

Earnings (loss) before income taxes (267) (239) (876) 91

Income tax expense (benefit) (73) (60) (224) 23

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 nine months of 2024.

Investment Gains and Investment Partnership Gains

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.

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.

Third Quarter First Nine Months

General and administrative 596 638 1,234

Total costs and expenses 4,962 3,563 8,525

Gains on sales of properties 481 — 481

Earnings before income taxes $ 1,387 $ 79 $ 1,466

Business Segment Reporting (continued)

First Quarter

Revenue $ 1,407 $ 212

Cost and expenses:

Licensing and media cost 1,651 503

General and administrative 43 63

Depreciation and amortization 70 —

Total costs and expenses 1,764 566

Earnings before income taxes $ ( 357 ) $ ( 354 )

Reconciliation of revenues and earnings (loss) before income taxes of our business segments to the consolidated amounts for each of the three months ended March 31 follows.

Revenues Earnings (losses) before income taxes

2025 2024 2025 2024

Total operating businesses $ 95,035 $ 89,451 $ 15,142 $ 8,236

Investment partnership gains (losses) — — ( 49,592 ) 21,985

Tax expense (benefit) 8,867 (21,222) (5,438) (6,660)

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

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.

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

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.

Third Quarter First Nine Months

2024 2023 2024 2023

Interest expense on notes payable $ 275 $ 262 $ 317 $ 469

Tax benefit 65 60 75 107

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

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.

Investment gains (losses) — — ( 1,585 ) 1,713

Interest expenses not allocated to segments — — ( 900 ) —

Corporate and other — — ( 4,248 ) ( 2,539 )

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

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.

Financial Condition

Consolidated cash and investments are summarized below.

September 30,

2024 December 31, 2023

Cash and cash equivalents $ 29,891 $ 28,066

Investments 102,902 91,879

Fair value of interest in investment partnerships 491,589 472,772

Total cash and investments 624,382 592,717

portion of Company stock held by investment partnerships (289,998) (273,669)

Carrying value of cash and investments on balance sheet $ 334,384 $ 319,048

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

$ 95,035 $ 89,451 $ ( 41,183 ) $ 29,395

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