BH 10-Q Quarterly Report June 30, 2024 | Alphaminr
Biglari Holdings Inc.
ALPHAMINR

BH 10-Q Quarter ended June 30, 2024

Balance Sheet
Cash Flow
Income Statement
Debt
BIGLARI HOLDINGS INC.
bh-20240630
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2024
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
Commission file number 001-38477
BIGLARI HOLDINGS INC.
(Exact name of registrant as specified in its charter)

Indiana 82-3784946
(State or other jurisdiction of incorporation) (I.R.S. Employer Identification No.)

19100 Ridgewood Parkway,
Suite 1200
San Antonio, Texas 78259
(Address of principal executive offices) (Zip Code)
( 210 ) 344-3400
Registrant’s telephone number, including area code
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbols Name of each exchange on which registered
Class A Common Stock, no par value BH.A New York Stock Exchange
Class B Common Stock, no par value BH New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and an “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☒
Non-accelerated filer ☐ Smaller reporting company ☒
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
Number of shares of common stock outstanding as of August 6, 2024:
Class A common stock – 206,864
Class B common stock – 2,068,640

BIGLARI HOLDINGS INC.
INDEX
Page No.

PART 1 – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

BIGLARI HOLDINGS INC.

CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
June 30,
2024 		December 31,
2023
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 26,897 $ 28,066
Investments 93,619 91,879
Receivables 19,169 22,241
Inventories 3,587 2,980
Other current assets 7,882 7,385
Total current assets 151,154 152,551
Property and equipment 381,078 380,491
Operating lease assets 34,601 32,215
Goodwill and other intangible assets 75,540 76,760
Investment partnerships 158,731 199,103
Other assets 7,949 8,302
Total assets $ 809,053 $ 849,422
Liabilities and shareholders’ equity
Liabilities
Current liabilities:
Accounts payable and accrued expenses $ 60,126 $ 66,743
Loss and loss adjustment expenses 15,695 15,168
Unearned premiums 15,496 14,334
Current portion of lease obligations 14,406 14,855
Line of credit 50 —
Total current liabilities 105,773 111,100
Lease obligations 92,906 86,389
Deferred taxes 26,254 37,939
Asset retirement obligations 14,593 14,316
Other liabilities 348 348
Total liabilities 239,874 250,092
Shareholders’ equity
Common stock 1,138 1,138
Additional paid-in capital 385,594 385,594
Retained earnings 605,847 631,458
Accumulated other comprehensive loss ( 2,667 ) ( 2,518 )
Treasury stock, at cost ( 420,733 ) ( 416,342 )
Biglari Holdings Inc. shareholders’ equity 569,179 599,330
Total liabilities and shareholders’ equity $ 809,053 $ 849,422
See accompanying Notes to Consolidated Financial Statements.

1
BIGLARI HOLDINGS INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(dollars in thousands except per share amounts)
Second Quarter First Six Months
2024 2023 2024 2023
(Unaudited) (Unaudited)
Revenues
Restaurant operations $ 64,475 $ 64,491 $ 126,471 $ 125,620
Insurance premiums and other 17,694 17,547 35,427 33,776
Oil and gas 8,671 10,741 18,181 22,964
Licensing and media 301 761 513 1,356
Total revenues 91,141 93,540 180,592 183,716
Costs and expenses
Restaurant cost of sales 36,886 34,928 71,307 67,666
Insurance losses and underwriting expenses 15,745 13,267 30,808 26,280
Oil and gas production costs 4,282 3,512 8,781 8,983
Licensing and media costs 523 499 1,026 951
Selling, general and administrative 18,653 19,009 36,928 36,272
Gain on sale of oil and gas properties ( 16,165 ) — ( 16,646 ) —
Impairments 1,000 853 1,107 1,629
Depreciation, depletion, and amortization 9,122 10,094 19,175 20,034
Interest expense on leases 1,349 1,301 2,663 2,608
Interest expense on borrowings 42 40 42 207
Total costs and expenses 71,437 83,503 155,191 164,630
Other income
Investment gains (losses) ( 2,729 ) 353 ( 1,016 ) 3,991
Investment partnership gains (losses) ( 79,890 ) ( 7,496 ) ( 57,905 ) 65,092
Total other income (expenses) ( 82,619 ) ( 7,143 ) ( 58,921 ) 69,083
Earnings (loss) before income taxes ( 62,915 ) 2,894 ( 33,520 ) 88,169
Income tax expense (benefit) ( 14,725 ) 1,018 ( 7,909 ) 20,756
Net earnings (loss) ( 48,190 ) 1,876 ( 25,611 ) 67,413
Earnings attributable to noncontrolling interest — ( 60 ) — 591
Net earnings (loss) attributable to Biglari Holdings Inc. shareholders $ ( 48,190 ) $ 1,936 $ ( 25,611 ) $ 66,822
Net earnings (loss) per average equivalent Class A share * $ ( 171.89 ) $ 6.64 $ ( 90.80 ) $ 229.00
*Net earnings (loss) per average equivalent Class B share outstanding are one-fifth of the average equivalent Class A share or $( 34.38 ) and $( 18.16 ) for the second quarter and first six months of 2024, respectively, and $ 1.33 and $ 45.80 for the second quarter and first six months of 2023, respectively.
See accompanying Notes to Consolidated Financial Statements.
2
BIGLARI HOLDINGS INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(dollars in thousands)
Second Quarter First Six Months
2024 2023 2024 2023
(Unaudited) (Unaudited)
Net earnings (loss) $ ( 48,190 ) $ 1,876 $ ( 25,611 ) $ 67,413
Foreign currency translation ( 118 ) ( 322 ) ( 149 ) 10
Comprehensive income (loss) ( 48,308 ) 1,554 ( 25,760 ) 67,423
Comprehensive income (loss) attributable to noncontrolling interests — ( 60 ) — 591
Total comprehensive income (loss) attributable to Biglari Holdings Inc. shareholders $ ( 48,308 ) $ 1,614 $ ( 25,760 ) $ 66,832
See accompanying Notes to Consolidated Financial Statements.

3
BIGLARI HOLDINGS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
First Six Months
2024 2023
(Unaudited)
Operating activities
Net earnings (loss) $ ( 25,611 ) $ 67,413
Adjustments to reconcile net earnings (loss) to operating cash flows:
Depreciation, depletion, and amortization 19,175 20,034
Provision for deferred income taxes ( 11,656 ) 16,842
Asset impairments 1,107 1,629
Gains on sale of assets ( 19,618 ) ( 4,194 )
Investment and investment partnership gains and losses 58,921 ( 69,083 )
Distributions from investment partnerships 1,000 —
Changes in receivables, inventories and other assets 1,234 4,989
Changes in accounts payable and accrued expenses ( 3,642 ) ( 6,112 )
Net cash provided by operating activities 20,910 31,518
Investing activities
Capital expenditures ( 16,429 ) ( 10,557 )
Proceeds from property and equipment disposals 21,820 9,670
Purchases of noncontrolling interests — ( 5,387 )
Purchases of interests in limited partnerships ( 22,924 ) ( 9,100 )
Purchases of investments ( 43,152 ) ( 58,926 )
Sales of investments and redemptions of fixed maturity securities 41,099 45,826
Net cash used in investing activities ( 19,586 ) ( 28,474 )
Financing activities
Proceeds from line of credit 6,050 5,000
Payments on line of credit ( 6,000 ) ( 11,400 )
Principal payments on direct financing lease obligations ( 2,741 ) ( 3,078 )
Net cash used in financing activities ( 2,691 ) ( 9,478 )
Effect of exchange rate changes on cash ( 7 ) 98
Decrease in cash, cash equivalents and restricted cash ( 1,374 ) ( 6,336 )
Cash, cash equivalents and restricted cash at beginning of year 29,654 38,805
Cash, cash equivalents and restricted cash at end of second quarter $ 28,280 $ 32,469
June 30,
2024 2023
(Unaudited)
Cash and cash equivalents $ 26,897 $ 30,881
Restricted cash in other long-term assets 1,383 1,588
Cash, cash equivalents and restricted cash at end of second quarter $ 28,280 $ 32,469
See accompanying Notes to Consolidated Financial Statements.
4
BIGLARI HOLDINGS INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
(dollars in thousands)
Biglari Holdings Inc. Shareholders’ Equity
Common
Stock 		Additional Paid-In
Capital 		Retained
Earnings 		Accumulated Other Comprehensive Income (Loss) Treasury
Stock 		Non-controlling Interests Total
For the second quarter and first six months of 2024
Balance at December 31, 2023 $ 1,138 $ 385,594 $ 631,458 $ ( 2,518 ) $ ( 416,342 ) $ — $ 599,330
Net earnings (loss) 22,579 22,579
Other comprehensive loss ( 31 ) ( 31 )
Adjustment for holdings in investment partnerships ( 3,306 ) ( 3,306 )
Balance at March 31, 2024 $ 1,138 $ 385,594 $ 654,037 $ ( 2,549 ) $ ( 419,648 ) $ — $ 618,572
Net earnings (loss) ( 48,190 ) ( 48,190 )
Other comprehensive loss ( 118 ) ( 118 )
Adjustment for holdings in investment partnerships ( 1,085 ) ( 1,085 )
Balance at June 30, 2024 $ 1,138 $ 385,594 $ 605,847 $ ( 2,667 ) $ ( 420,733 ) $ — $ 569,179

For the second quarter and first six months of 2023
Balance at December 31, 2022 $ 1,138 $ 381,788 $ 576,510 $ ( 2,790 ) $ ( 409,680 ) $ 8,602 $ 555,568
Net earnings (loss) 64,886 651 65,537
Other comprehensive income 332 332
Adjustment for holdings in investment partnerships ( 239 ) ( 239 )
Balance at March 31, 2023 $ 1,138 $ 381,788 $ 641,396 $ ( 2,458 ) $ ( 409,919 ) $ 9,253 $ 621,198
Net earnings (loss) 1,936 ( 60 ) 1,876
Other comprehensive loss ( 322 ) ( 322 )
Adjustment for holdings in investment partnerships ( 1,011 ) ( 1,011 )
Purchases on noncontrolling interests 3,806 ( 9,193 ) ( 5,387 )
Balance at June 30, 2023 $ 1,138 $ 385,594 $ 643,332 $ ( 2,780 ) $ ( 410,930 ) $ — $ 616,354
See accompanying Notes to Consolidated Financial Statements.
5
BIGLARI HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2024
(dollars in thousands, except share and per share data)
Note 1. Summary of Significant Accounting Policies
Description of Business
The accompanying unaudited consolidated financial statements of Biglari Holdings Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) applicable to interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In our opinion, all adjustments considered necessary to present fairly the results of the interim periods have been included and consist only of normal recurring adjustments. The results for the interim periods shown are not necessarily indicative of results for the year. The financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2023.
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. The Company’s largest operating subsidiaries are involved in the franchising and operating of restaurants. 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. Biglari.
As of June 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. Intercompany accounts and transactions have been eliminated in consolidation.
Note 2. Earnings Per Share
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. However, these shares are legally outstanding.

6
Note 2. Earnings Per Share (continued)
The following table presents shares authorized, issued and outstanding on June 30, 2024 and December 31, 2023.
June 30, 2024 December 31, 2023
Class A Class B Class A Class B
Common stock authorized 500,000 10,000,000 500,000 10,000,000
Common stock issued and outstanding 206,864 2,068,640 206,864 2,068,640

The Company has applied the “two-class method” of computing earnings per share as prescribed in Accounting Standards Codification (“ASC”) 260, “ Earnings Per Share ”. (Class B shares are economically equivalent to one-fifth of a Class A share.) The equivalent Class A common stock applied for computing earnings per share excludes the proportional shares of Biglari Holdings’ stock held by the investment partnerships. In the tabulation below is the weighted average equivalent Class A common stock for earnings per share.
Second Quarter First Six Months
2024 2023 2024 2023
Equivalent Class A common stock outstanding 620,592 620,592 620,592 620,592
Proportional ownership of Company stock held by investment partnerships 340,232 328,898 338,518 328,790
Equivalent Class A common stock for earnings per share 280,360 291,694 282,074 291,802
Note 3. Investments
We classify investments in fixed maturity securities at the acquisition date as available-for-sale. Realized gains and losses on disposals of investments are determined on a specific identification basis. Dividends and interest 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.

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.
Note 4. Investment Partnerships
The Company reports on the limited partnership interests in investment partnerships under the equity method of accounting. We record our proportional share of equity in the investment partnerships but exclude Company common stock held by said partnerships. 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. The Company records gains/losses from investment partnerships (inclusive of the investment partnerships’ unrealized gains and losses on their securities) in the consolidated statements of earnings based on our carrying value of these partnerships. The fair value is calculated net of the general partner’s accrued incentive fees. Gains and losses on Company common stock included in the earnings of these partnerships are eliminated because they are recorded as treasury stock.
Biglari Capital Corp. is the general partner of the investment partnerships. Biglari Capital Corp. is solely owned by Mr. Biglari.


7
Note 4. Investment Partnerships (continued)

The fair value and adjustment for Company common stock held by the investment partnerships to determine the carrying value of our partnership interest are presented below.
Fair Value Company
Common Stock 		Carrying Value
Partnership interest at December 31, 2023 $ 472,772 $ 273,669 $ 199,103
Investment partnership gains (losses) ( 12,645 ) 45,260 ( 57,905 )
Contributions (net of distributions) 21,924 21,924
Changes in proportionate share of Company stock held 4,391 ( 4,391 )
Partnership interest at June 30, 2024 $ 482,051 $ 323,320 $ 158,731
Fair Value Company
Common Stock 		Carrying Value
Partnership interest at December 31, 2022 $ 383,004 $ 227,210 $ 155,794
Investment partnership gains (losses) 157,768 92,676 65,092
Contributions (net of distributions) 9,100 9,100
Changes in proportionate share of Company stock held 1,250 ( 1,250 )
Partnership interest at June 30, 2023 $ 549,872 $ 321,136 $ 228,736
The carrying value of the investment partnerships net of deferred taxes is presented below.
June 30,
2024 		December 31, 2023
Carrying value of investment partnerships $ 158,731 $ 199,103
Deferred tax liability related to investment partnerships ( 13,480 ) ( 27,896 )
Carrying value of investment partnerships net of deferred taxes $ 145,251 $ 171,207
We expect that a majority of the $ 13,480 deferred tax liability enumerated above will not become due until the dissolution of the investment partnerships.
The Company’s proportionate share of Company stock held by investment partnerships at cost was $ 420,733 and $ 416,342 at June 30, 2024 and December 31, 2023, respectively.
The carrying value of the partnership interest approximates fair value adjusted by the value of held Company stock.  Fair value of our partnership interest is assessed according to our proportional ownership interest of the fair value of investments held by the investment partnerships. Unrealized gains and losses on marketable securities held by the investment partnerships affect our net earnings.
Gains/losses from investment partnerships recorded in the Company’s consolidated statements of earnings are presented below.
Second Quarter First Six Months
2024 2023 2024 2023
Gains (losses) from investment partnerships $ ( 79,890 ) $ ( 7,496 ) $ ( 57,905 ) $ 65,092
Tax expense (benefit) ( 19,142 ) ( 1,997 ) ( 14,305 ) 14,562
Contribution to net earnings (loss) $ ( 60,748 ) $ ( 5,499 ) $ ( 43,600 ) $ 50,530
On December 31 of each year, the general partner of the investment partnerships, Biglari Capital Corp., will earn an incentive reallocation fee for the Company’s investments equal to 25 % of the net profits above an annual hurdle rate of 6 % over the previous high-water mark. Our policy is to accrue an estimated incentive fee throughout the year. The total incentive reallocation from Biglari Holdings to Biglari Capital Corp. includes gains on the Company’s common stock. 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.
8
Note 4. Investment Partnerships (continued)

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 June 30, 2024 $ 408,170 $ 331,486
Total liabilities as of June 30, 2024 $ 24,074 $ 179,033
Revenue for the first six months of 2024 $ 33,316 $ ( 42,355 )
Earnings for the first six months of 2024 $ 32,417 $ ( 48,207 )
Biglari Holdings’ ownership interest as of June 30, 2024 90.2 % 87.3 %
Total assets as of December 31, 2023 $ 371,365 $ 373,302
Total liabilities as of December 31, 2023 $ 26,594 $ 185,024
Revenue for the first six months of 2023 $ 117,282 $ 68,060
Earnings for the first six months of 2023 $ 116,952 $ 63,273
Biglari Holdings’ ownership interest as of June 30, 2023 88.8 % 86.0 %
Revenue in the financial information of the investment partnerships, summarized above, includes investment income and unrealized gains and losses on investments.
Note 5. Property and Equipment
Property and equipment is composed of the following.
June 30,
2024 		December 31,
2023
Land $ 137,250 $ 139,897
Buildings 157,102 151,716
Land and leasehold improvements 150,879 149,795
Equipment 212,441 212,424
Oil and gas properties 153,063 145,065
Construction in progress 531 1,629
811,266 800,526
Less accumulated depreciation, depletion, and amortization ( 430,188 ) ( 420,035 )
Property and equipment, net $ 381,078 $ 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.
9

Note 6. Goodwill and Other Intangible Assets
Goodwill
Goodwill consists of the excess of the purchase price over the fair value of the net assets acquired in connection with business acquisitions.
A reconciliation of the change in the carrying value of goodwill is as follows.
Goodwill
Goodwill at December 31, 2023
Goodwill $ 53,830
Impairments prior to 2024 ( 300 )
53,530
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
$ 52,513

Goodwill and indefinite-lived intangible asset impairment reviews include determining the estimated fair values of our reporting units and indefinite-lived intangible assets. The key assumptions and inputs used in such determinations may include forecasting revenues and expenses, cash flows and capital expenditures, as well as an appropriate discount rate and other inputs. Significant judgment by management is required in estimating the fair value of a reporting unit and in performing impairment reviews. Due to the inherent subjectivity and uncertainty in forecasting future cash flows and earnings over long periods of time, actual results may differ materially from the forecasts. If the carrying value of the indefinite-lived intangible asset exceeds fair value, the excess is charged to earnings as an impairment loss. If the carrying value of a reporting unit exceeds the estimated fair value of the reporting unit, then the excess, limited to the carrying amount of goodwill, will be charged to earnings as an impairment loss. There was no impairment recorded by Steak n Shake for goodwill during the first six months of 2024 or 2023. During the second quarter of 2024, we performed our annual assessment of our recoverability of goodwill related to Western Sizzlin and an impairment to goodwill of $ 1,000 was recorded. Western Sizzlin did not record an impairment for goodwill during the first six months of 2023. There was no impairment recorded for intangible assets during the first six months of 2024 and a $ 20 impairment was recorded in the first six months of 2023.
Other Intangible Assets
Intangible assets with indefinite lives are composed of the following.
Trade Names Lease Rights Total
Balance at December 31, 2023
Intangibles $ 15,876 $ 11,102 $ 26,978
Impairments prior to 2024 — ( 3,748 ) ( 3,748 )
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
$ 15,876 $ 7,151 $ 23,027
Note 7. Restaurant Operations Revenues
Restaurant operations revenues were as follows.
Second Quarter First Six Months
2024 2023 2024 2023
Net sales $ 40,815 $ 39,524 $ 79,550 $ 76,418
Franchise partner fees 18,149 19,070 35,907 36,982
Franchise royalties and fees 3,615 4,125 7,092 8,383
Other 1,896 1,772 3,922 3,837
$ 64,475 $ 64,491 $ 126,471 $ 125,620
10
Note 7. Restaurant Operations Revenues (continued)
Net Sales
Net sales are composed of retail sales of food through company-operated stores. Company-operated store revenues are recognized, net of discounts and sales taxes, when our obligation to perform is satisfied at the point of sale. Sales taxes related to these sales are collected from customers and remitted to the appropriate taxing authority and are not reflected in the Company’s consolidated statements of earnings as revenue.
Franchise Partner Fees
Franchise partner fees are composed of up to 15 % of sales as well as 50 % of profits. We are therefore fully affected by the operating results of the business, unlike in a traditional franchising arrangement, where the franchisor obtains a royalty fee based on sales only. We generate most of our revenue from our share of the franchise partners’ profits. An initial franchise fee of ten thousand dollars is recognized when the operator becomes a franchise partner. The Company recognizes franchise partner fees monthly as underlying restaurant sales occur.
The Company leases or subleases property and equipment to franchise partners under lease arrangements. 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.
Franchise Royalties and Fees
Franchise royalties and fees from Steak n Shake and Western Sizzlin franchisees are based upon a percentage of sales of the franchise restaurant and are recognized as earned. Franchise royalties are billed on a monthly basis. Initial franchise fees when a new restaurant opens or at the start of a new franchise term are recorded as deferred revenue when received and recognized as revenue over the term of the franchise agreement.
Other Revenue
Restaurant operations sell gift cards to customers which can be redeemed for retail food sales within our stores. Gift cards are recorded as deferred revenue when issued and are subsequently recorded as net sales upon redemption. Restaurant operations estimate breakage related to gift cards when the likelihood of redemption is remote. This estimate utilizes historical trends based on the vintage of the gift card. Breakage on gift cards is recorded as other revenue in proportion to the rate of gift card redemptions by vintage.
Note 8. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses include the following.
June 30,
2024 		December 31,
2023
Accounts payable $ 25,809 $ 22,448
Gift cards and other marketing 5,391 7,089
Insurance accruals 2,116 2,565
Compensation 4,969 12,821
Deferred revenue 6,086 5,314
Taxes payable 11,167 11,050
Oil and gas payable 2,422 3,560
Other 2,166 1,896
Accounts payable and accrued expenses $ 60,126 $ 66,743

11

Note 9. Lines of Credit
Biglari Holdings Line of Credit
Biglari Holdings’ available line of credit is $ 30,000 . The line of credit matures on September 12, 2024. 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.

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.

Note 10. 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.
June 30,
2024 		June 30,
2023
Balances at beginning of year:
Gross liabilities $ 16,105 $ 17,520
Reinsurance recoverable on unpaid losses ( 937 ) ( 715 )
Net liabilities 15,168 16,805
Incurred losses and loss adjustment expenses:
Current accident year 23,539 19,984
Prior accident years ( 1,330 ) ( 3,016 )
Total 22,209 16,968
Paid losses and loss adjustment expenses:
Current accident year 16,653 14,426
Prior accident years 5,029 4,667
Total 21,682 19,093
Balances at June 30:
Net liabilities 15,695 14,680
Reinsurance recoverable on unpaid losses 272 1,150
Gross liabilities $ 15,967 $ 15,830
We recorded net reductions of estimated ultimate liabilities for prior accident years of $ 1,330 and $ 3,016 in the first six months of 2024 and 2023, respectively, which produced corresponding reductions in incurred losses and loss adjustment expenses in those periods. These reductions as a percentage of the net liabilities at the beginning of each year were 8.8 % in 2024 and 17.9 % in 2023.

12
Note 11. Lease Assets and Obligations
Lease obligations include the following.
Current portion of lease obligations June 30,
2024 		December 31,
2023
Finance lease liabilities $ 1,274 $ 1,258
Finance obligations 4,479 4,826
Operating lease liabilities 8,653 8,771
Total current portion of lease obligations $ 14,406 $ 14,855
Long-term lease obligations
Finance lease liabilities $ 3,328 $ 3,581
Finance obligations 61,098 56,471
Operating lease liabilities 28,480 26,337
Total long-term lease obligations $ 92,906 $ 86,389
Nature of Leases
Steak n Shake and Western Sizzlin operate restaurants that are located on sites owned by us or leased from third parties. In addition, they own sites and lease sites from third parties that are leased and/or subleased to franchisees.
Lease Costs
A significant portion of our operating and finance lease portfolio includes restaurant locations. We recognize fixed lease expense for operating leases on a straight-line basis over the lease term. For finance leases, we recognize amortization expense on the right-of-use asset and interest expense on the lease liability over the lease term.
Total lease cost consists of the following.
Second Quarter First Six Months
2024 2023 2024 2023
Finance lease costs:
Amortization of right-of-use assets $ 221 $ 242 $ 447 $ 484
Interest on lease liabilities 83 86 167 177
Operating and variable lease costs 2,948 3,081 5,777 6,248
Sublease income ( 2,986 ) ( 3,054 ) ( 5,975 ) ( 6,145 )
Total lease costs $ 266 $ 355 $ 416 $ 764
Supplemental cash flow information related to leases is as follows.
First Six Months
2024 2023
Cash paid for amounts included in the measurement of lease liabilities:
Financing cash flows from finance leases $ 621 $ 636
Operating cash flows from finance leases $ 167 $ 177
Operating cash flows from operating leases $ 5,409 $ 6,689






13
Note 11. Lease Assets and Obligations (continued)
Supplemental balance sheet information related to leases is as follows.
June 30,
2024 		December 31,
2023
Finance leases:
Property and equipment, net $ 3,423 $ 3,574
Weighted-average lease terms and discount rates are as follows.
June 30,
2024
Weighted-average remaining lease terms:
Finance leases 4.62 years
Operating leases 6.00 years
Weighted-average discount rates:
Finance leases 7.0 %
Operating leases 7.0 %
Maturities of lease liabilities as of June 30, 2024 are as follows.
Year Operating
Leases 		Finance
Leases
Remainder of 2024 $ 5,636 $ 756
2025 10,198 1,486
2026 7,709 1,163
2027 5,337 828
2028 4,518 437
After 2028 11,849 729
Total lease payments 45,247 5,399
Less interest 8,114 797
Total lease liabilities $ 37,133 $ 4,602
Lease Income
The components of lease income recorded in restaurant operations are as follows.
Second Quarter First Six Months
2024 2023 2024 2023
Operating lease income $ 4,236 $ 4,044 $ 8,417 $ 8,129
Variable lease income 1,824 1,921 3,623 3,705
Total lease income $ 6,060 $ 5,965 $ 12,040 $ 11,834








14
Note 11. Lease Assets and Obligations (continued)
The following table displays the Company’s future minimum rental receipts for non-cancelable leases and subleases as of June 30, 2024. Franchise partner leases and subleases are short-term leases and have been excluded from the table.

Operating Leases
Year Subleases Owned Properties
Remainder of 2024 $ 292 $ 198
2025 544 404
2026 225 407
2027 206 415
2028 86 424
After 2028 — 2,435
Total future minimum receipts $ 1,353 $ 4,283
Note 12. Income Taxes
In determining the quarterly provision for income taxes, the Company used an estimated annual effective tax rate for the first six months of 2024 and 2023. Our periodic effective income tax rate is affected by the relative mix of pre-tax earnings or losses and underlying income tax rates applicable to the various taxing jurisdictions.
Income tax benefit for the second quarter of 2024 was $ 14,725 compared to an income tax expense of $ 1,018 for the second quarter of 2023.  Income tax benefit for the first six months of 2024 was $ 7,909 compared to an income tax expense of $ 20,756 for the first six months of 2023. The variance in income taxes between 2024 and 2023 is attributable to taxes on income generated by the investment partnerships.  Investment partnership pre-tax losses were $ 79,890 during the second quarter of 2024 compared to pre-tax losses of $ 7,496 during the second quarter of 2023. Investment partnership pre-tax losses were $ 57,905 during the first six months of 2024 compared to pre-tax gains of $ 65,092 during the first six months of 2023.
Note 13. Commitments and Contingencies

We are involved in various legal proceedings and have certain unresolved claims pending. We believe, based on examination of these matters and experiences to date, that the ultimate liability, if any, in excess of amounts already provided in our consolidated financial statements is not likely to have a material effect on our results of operations, financial position or cash flow.
Note 14. Fair Value of Financial Assets
The fair values of substantially all of our financial instruments were measured using market or income approaches. Considerable judgment may be required in interpreting market data used to develop the estimates of fair value. Accordingly, the fair values presented are not necessarily indicative of the amounts that could be realized in an actual current market exchange. The use of alternative market assumptions and/or estimation methodologies may have a material effect on the estimated fair value.
The hierarchy for measuring fair value consists of Levels 1 through 3, which are described below.
• Level 1 – Inputs represent unadjusted quoted prices for identical assets or liabilities exchanged in active markets.
• Level 2 – Inputs include directly or indirectly observable inputs (other than Level 1 inputs) such as quoted prices for similar assets or liabilities exchanged in active or inactive markets; quoted prices for identical assets or liabilities exchanged in inactive markets; other inputs that may be considered in fair value determinations of the assets or liabilities, such as interest rates and yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates; 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
15
Note 14. 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. Management is required to use its own assumptions regarding unobservable inputs because there is little, if any, market activity in the assets or liabilities and we may be unable to corroborate the related observable inputs. Unobservable inputs require management to make certain projections and assumptions about the information that would be used by market participants in pricing assets or liabilities.
The following methods and assumptions were used to determine the fair value of each class of the following assets recorded at fair value in the consolidated balance sheets:
Cash equivalents: Cash equivalents primarily consist of money market funds which are classified as Level 1 of the fair value hierarchy.
Equity securities: The Company’s investments in equity securities are classified as Level 1 of the fair value hierarchy.
Bonds: 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 June 30, 2024 and December 31, 2023, the fair values of financial assets were as follows.
June 30, 2024 December 31, 2023
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Assets
Cash equivalents $ 4,780 $ — $ — $ 4,780 $ 2,374 $ — $ — $ 2,374
Equity securities
Consumer goods 26,190 — — 26,190 26,660 — — 26,660
Other 4,916 — — 4,916 3,171 — — 3,171
Bonds
Government 62,156 — — 62,156 61,536 — — 61,536
Corporate 799 — — 799 3,199 — — 3,199
Total assets at fair value $ 98,841 $ — $ — $ 98,841 $ 96,940 $ — $ — $ 96,940
There were no changes in our valuation techniques used to measure fair values on a recurring basis.
Note 15. Related Party Transactions
Service Agreement
The Company is party to a service agreement with Biglari Enterprises LLC (“Biglari Enterprises”) under which Biglari Enterprises provides business and administrative related services to the Company. Biglari Enterprises is owned by Mr. Biglari.

The Company paid Biglari Enterprises $ 4,800 in service fees during the first six months of 2024 and $ 4,200 during the first six months of 2023. The service agreement does not alter the hurdle rate connected with the incentive reallocation paid to Biglari Capital Corp.
Incentive Agreement
The Incentive Agreement establishes a performance-based annual incentive payment for Mr. Biglari contingent upon the growth in adjusted equity in each year attributable to our operating businesses. In order for Mr. Biglari to receive any incentive, our operating businesses must achieve an annual increase in shareholders’ equity in excess of 6 % (the “hurdle rate”) above the previous highest level (the “high-water mark”). Mr. Biglari will receive 25 % of any incremental book value created above the high-water mark plus the hurdle rate.
16
Note 16. Business Segment Reporting
Our reportable business segments are organized in a manner that reflects how management views those business activities. Our restaurant operations include Steak n Shake and Western Sizzlin. Our insurance operations include First Guard and Southern Pioneer.  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 second quarters and first six months of 2024 and 2023 is presented in the tables which follow.
Revenues
Second Quarter First Six Months
2024 2023 2024 2023
Operating Businesses:
Restaurant Operations:
Steak n Shake $ 61,711 $ 61,577 $ 121,065 $ 120,064
Western Sizzlin 2,764 2,914 5,406 5,556
Total Restaurant Operations 64,475 64,491 126,471 125,620
Insurance Operations:
Underwriting
First Guard 9,494 9,215 18,804 18,114
Southern Pioneer 6,797 6,756 13,409 12,621
Investment income and other 1,403 1,576 3,214 3,041
Total Insurance Operations 17,694 17,547 35,427 33,776
Oil and Gas Operations:
Abraxas Petroleum 4,992 5,931 10,860 13,183
Southern Oil 3,679 4,810 7,321 9,781
Total Oil and Gas Operations 8,671 10,741 18,181 22,964
Maxim 301 761 513 1,356
$ 91,141 $ 93,540 $ 180,592 $ 183,716


17
Note 16. Business Segment Reporting (continued)
Earnings (Losses) Before Income Taxes
Second Quarter First Six Months
2024 2023 2024 2023
Operating Businesses:
Restaurant Operations:
Steak n Shake $ 5,509 $ 8,634 $ 9,746 $ 15,959
Western Sizzlin 256 593 897 1,065
Total Restaurant Operations 5,765 9,227 10,643 17,024
Insurance Operations:
Underwriting:
First Guard 1,331 3,154 2,131 5,016
Southern Pioneer ( 785 ) ( 451 ) ( 726 ) ( 562 )
Investment income and other 1,304 1,265 2,691 2,301
Total Insurance Operations 1,850 3,968 4,096 6,755
Oil and Gas Operations:
Abraxas Petroleum 17,414 1,845 18,801 3,054
Southern Oil ( 63 ) 1,045 16 1,939
Total Oil and Gas Operations 17,351 2,890 18,817 4,993
Maxim ( 255 ) 208 ( 609 ) 330
Interest expense not allocated to segments ( 42 ) ( 40 ) ( 42 ) ( 207 )
Total Operating Businesses 24,669 16,253 32,905 28,895
Goodwill impairment ( 1,000 ) — ( 1,000 ) —
Corporate and other ( 3,965 ) ( 6,216 ) ( 6,504 ) ( 9,809 )
Investment gains (losses) ( 2,729 ) 353 ( 1,016 ) 3,991
Investment partnership gains (losses) ( 79,890 ) ( 7,496 ) ( 57,905 ) 65,092
$ ( 62,915 ) $ 2,894 $ ( 33,520 ) $ 88,169
18

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations
(dollars in thousands except per share data)
Overview
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. Biglari.
As of June 30, 2024, Mr. Biglari beneficially owns shares of the Company that represent approximately 71.5% of the voting interest.
Net earnings (loss) attributable to Biglari Holdings Inc. shareholders are disaggregated in the table that follows. Amounts are recorded after deducting income taxes.
Second Quarter First Six Months
2024 2023 2024 2023
Operating businesses:
Restaurant $ 4,244 $ 6,935 $ 7,717 $ 12,775
Insurance 1,454 3,132 3,192 5,301
Oil and gas 13,369 2,150 14,518 3,820
Brand licensing (193) 156 (458) 247
Interest expense (32) (31) (32) (160)
Total operating businesses 18,842 12,342 24,937 21,983
Goodwill impairment (1,000) — (1,000) —
Corporate and other (3,125) (5,243) (5,121) (8,241)
Investment partnership gains (losses) (60,748) (5,499) (43,600) 50,530
Investment gains (losses) (2,159) 276 (827) 3,141
Net earnings (loss) (48,190) 1,876 (25,611) 67,413
Earnings (loss) attributable to noncontrolling interest — (60) — 591
Net earnings (loss) attributable to Biglari Holdings Inc. shareholders $ (48,190) $ 1,936 $ (25,611) $ 66,822
19

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Restaurants
Our restaurant businesses, which include Steak n Shake and Western Sizzlin, comprise 477 company-operated and franchise restaurants as of June 30, 2024.
Steak n Shake Western Sizzlin
Company-
operated 		Franchise
Partner 		Traditional
Franchise 		Company-
operated 		Franchise Total
Total stores as of December 31, 2023
148 181 128 3 32 492
Corporate stores transitioned (1) 1 — — — —
Net restaurants opened (closed) (5) — (8) — (2) (15)
Total stores as of June 30, 2024
142 182 120 3 30 477
Total stores as of December 31, 2022
177 175 154 3 36 545
Corporate stores transitioned (2) 2 — — — —
Net restaurants opened (closed) (8) — (16) — — (24)
Total stores as of June 30, 2023
167 177 138 3 36 521
As of June 30, 2024, 15 of the 142 company-operated Steak n Shake stores were closed. Steak n Shake plans to sell or lease 8 of the 15 locations and refranchise the balance.


20

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Restaurant operations are summarized below.
Second Quarter First Six Months
2024 2023 2024 2023
Revenue
Net sales $ 40,815 $ 39,524 $ 79,550 $ 76,418
Franchise partner fees 18,149 19,070 35,907 36,982
Franchise royalties and fees 3,615 4,125 7,092 8,383
Other revenue 1,896 1,772 3,922 3,837
Total revenue 64,475 64,491 126,471 125,620
Restaurant cost of sales
Cost of food 12,357 30.3 % 11,702 29.6 % 23,331 29.3 % 22,150 29.0 %
Labor costs 12,992 31.8 % 12,175 30.8 % 25,536 32.1 % 23,885 31.3 %
Occupancy and other 11,537 28.3 % 11,051 28.0 % 22,440 28.2 % 21,631 28.3 %
Total cost of sales 36,886 34,928 71,307 67,666
Selling, general and administrative
General and administrative 13,016 20.2 % 10,790 16.7 % 24,746 19.6 % 21,253 16.9 %
Marketing 2,857 4.4 % 3,294 5.1 % 5,802 4.6 % 6,247 5.0 %
Other expenses (income) (2,208) (3.4) % (2,689) (4.2) % (2,442) (1.9) % (4,301) (3.4) %
Total selling, general and administrative 13,665 21.2 % 11,395 17.7 % 28,106 22.2 % 23,199 18.5 %
Impairments — — % 853 1.3 % 107 0.1 % 1,629 1.3 %
Depreciation and amortization 6,810 10.6 % 6,787 10.5 % 13,645 10.8 % 13,494 10.7 %
Interest on finance leases and obligations 1,349 1,301 2,663 2,608
Earnings before income taxes 5,765 9,227 10,643 17,024
Income tax expense 1,521 2,292 2,926 4,249
Contribution to net earnings $ 4,244 $ 6,935 $ 7,717 $ 12,775
Cost of food, labor costs, and occupancy and other costs are expressed as a percentage of net sales.
General and administrative, marketing, other expenses, impairments, and depreciation are expressed as a percentage of total revenue.

Net sales for the second quarter and first six months of 2024 were $40,815 and $79,550, respectively, representing an increase of $1,291 or 3.3% and $3,132 or 4.1%, compared to the second quarter and first six months of 2023, respectively. The increase in net sales was primarily due to an increase in Steak n Shake’s same-store sales of 7.0% during the second quarter of 2024.

For company-operated units, sales to the end customer are recorded as revenue generated by the Company, but for franchise partner units, only our share of the restaurant’s profits, along with certain fees, are recorded as revenue. Because we derive most of our revenue from our share of the profits, revenue will decline as we transition from company-operated units to franchise partner units.

21

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Our franchise partner fees were $18,149 during the second quarter of 2024, as compared to $19,070 during the second quarter of 2023. Franchise partner fees were $35,907 and $36,982 during the first six months of 2024 and 2023, respectively. As of June 30, 2024 and June 30, 2023, there were 182 and 177 franchise partner units, respectively. Included in franchise partner fees were $5,780 and $5,763 of rental income during the second quarter of 2024 and 2023, respectively, and $11,485 and $11,338 during the first six months of 2024 and 2023, respectively. Franchise partners rent buildings and equipment from Steak n Shake. Our share of franchise partner fees was lower primarily because our franchise partners’ food and labor expenses were higher during the first six months of 2024 as compared to the first six months of 2023.
The franchise royalties and fees generated by the traditional franchising business were $3,615 during the second quarter of 2024, as compared to $4,125 during the second quarter of 2023. Franchise royalties and fees during the first six months of 2024 were $7,092 as compared to $8,383 during the first six months of 2023. There were 120 Steak n Shake traditional units open on June 30, 2024, as compared to 138 units open on June 30, 2023. The decrease in franchise royalties and fees was primarily due to fewer traditional units open during 2024.
The cost of food at company-operated units during the second quarter of 2024 was $12,357 or 30.3% of net sales, as compared to $11,702 or 29.6% of net sales during the second quarter of 2023. The cost of food at company-operated units during the first six months of 2024 was $23,331 or 29.3% of net sales, as compared to $22,150 or 29.0% of net sales during the first six months of 2023. Cost of food expressed as a percentage of net sales remained relatively consistent.

Labor costs at company-operated restaurants during the second quarter of 2024 were $12,992 or 31.8% of net sales, as compared to $12,175 or 30.8% of net sales in the second quarter of 2023. Labor costs at company-operated restaurants during the first six months of 2024 were $25,536 or 32.1% of net sales, as compared to $23,885 or 31.3% of net sales in 2023. Labor costs expressed as a percentage of net sales increased during 2024 compared to 2023 primarily due to an increase in store level managers in Steak n Shake company-operated restaurants.
General and administrative expenses during the second quarter of 2024 were $13,016 or 20.2% of total revenue, as compared to $10,790 or 16.7% of total revenue in the second quarter of 2023. General and administrative expenses during the first six months of 2024 were $24,746 or 19.6% of total revenue, as compared to $21,253 or 16.9% of total revenue in the first six months of 2023. The increase in general and administrative expenses was mainly attributable to higher personnel costs at Steak n Shake.
The Company recorded $853 of impairment charges in the second quarter of 2023 and $107 and $1,629 in the first six months of 2024 and 2023, respectively, related to underperforming stores.
Interest on obligations under leases was $2,663 during 2024 versus $2,608 during 2023.
Other income was $2,442 during 2024 versus $4,301 during 2023. During 2024, Western Sizzlin received a settlement of $450. During 2024, Steak n Shake sold three properties for a gain of $1,957 and sold four properties for a gain of $4,414 during 2023.

22

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
To better convey the performance of the franchise partnership model, the table below shows the underlying sales, cost of food, labor costs, and other restaurant costs of the franchise partners. We believe the franchise partner information is useful to readers, as they have a direct effect on Steak n Shake’s profitability.
Second Quarter First Six Months
2024 2023 2024 2023
Revenue
Net sales and other $ 83,470 $ 83,009 $ 164,258 $ 160,961
Restaurant cost of sales
Cost of food $ 24,840 29.8 % $ 23,098 27.8 % $ 48,010 29.2 % $ 43,969 27.3 %
Labor costs 22,305 26.7 % 22,000 26.5 % 44,070 26.8 % 42,940 26.7 %
Occupancy and other 17,163 20.6 % 16,290 19.6 % 33,941 20.7 % 32,157 20.0 %
Total cost of sales $ 64,308 $ 61,388 $ 126,021 $ 119,066

The Company’s consolidated financial statements do not include data in the table above. Figures are shown for information purposes only.
Insurance
We view our insurance businesses as possessing two activities: underwriting and investing. Underwriting decisions are the responsibility of the unit managers, whereas investing decisions are the responsibility of our Chairman and CEO, Sardar Biglari. Our business units are operated under separate local management. Biglari Holdings’ insurance operations consist of First Guard and Southern Pioneer.
Underwriting results of our insurance operations are summarized below.
Second Quarter First Six Months
2024 2023 2024 2023
Underwriting gain attributable to:
First Guard $ 1,331 $ 3,155 $ 2,131 $ 5,017
Southern Pioneer (785) (451) (726) (562)
Pre-tax underwriting gain 546 2,704 1,405 4,455
Income tax expense 115 568 295 936
Net underwriting gain $ 431 $ 2,136 $ 1,110 $ 3,519

23

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Earnings of our insurance operations are summarized below.
Second Quarter First Six Months
2024 2023 2024 2023
Premiums earned $ 16,291 $ 15,971 $ 32,213 $ 30,735
Insurance losses 10,962 8,372 21,840 16,968
Underwriting expenses 4,783 4,895 8,968 9,312
Pre-tax underwriting gain 546 2,704 1,405 4,455
Other income and expenses
Investment income 955 752 1,870 1,337
Other income (expenses) 349 512 821 963
Total other income 1,304 1,264 2,691 2,300
Earnings before income taxes 1,850 3,968 4,096 6,755
Income tax expense 396 836 904 1,454
Contribution to net earnings $ 1,454 $ 3,132 $ 3,192 $ 5,301

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

First Guard

First Guard is a direct underwriter of commercial truck insurance, selling physical damage and nontrucking liability insurance to truckers. First Guard’s insurance products are marketed primarily through direct response methods via the Internet or by telephone. First Guard’s cost-efficient direct response marketing methods enable it to be a low-cost insurer. A summary of First Guard’s underwriting results follows.
Second Quarter First Six Months
2024 2023 2024 2023
Amount % Amount % Amount % Amount %
Premiums earned $ 9,494 100.0 % $ 9,215 100.0 % $ 18,804 100.0 % $ 18,114 100.0 %
Insurance losses 6,161 64.9 % 4,254 46.2 % 12,936 68.8 % 9,498 52.4 %
Underwriting expenses 2,002 21.1 % 1,806 19.6 % 3,737 19.9 % 3,599 19.9 %
Total losses and expenses 8,163 86.0 % 6,060 65.8 % 16,673 88.7 % 13,097 72.3 %
Pre-tax underwriting gain $ 1,331 $ 3,155 $ 2,131 $ 5,017

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


24

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Southern Pioneer

Southern Pioneer underwrites garage liability and commercial property insurance, as well as homeowners and dwelling fire insurance. A summary of Southern Pioneer’s underwriting results follows.

Second Quarter First Six Months
2024 2023 2024 2023
Amount % Amount % Amount % Amount %
Premiums earned $ 6,797 100.0 % $ 6,756 100.0 % $ 13,409 100.0 % $ 12,621 100.0 %
Insurance losses 4,801 70.6 % 4,118 61.0 % 8,904 66.4 % 7,470 59.2 %
Underwriting expenses 2,781 40.9 % 3,089 45.7 % 5,231 39.0 % 5,713 45.3 %
Total losses and expenses 7,582 111.5 % 7,207 106.7 % 14,135 105.4 % 13,183 104.5 %
Pre-tax underwriting gain (loss) $ (785) $ (451) $ (726) $ (562)
Southern Pioneer’s ratio of losses and loss adjustment expenses to premiums earned was 70.6% during the second quarter of 2024 as compared to 61.0% during the second quarter of 2023 and 66.4% during the first six months of 2024 as compared to 59.2% during the first six months of 2023.
A summary of net investment income attributable to our insurance operations follows.

Second Quarter First Six Months
2024 2023 2024 2023
Interest, dividends and other investment income:
First Guard $ 533 $ 431 $ 1,103 $ 818
Southern Pioneer 422 321 767 519
Pre-tax investment income 955 752 1,870 1,337
Income tax expense 201 158 393 281
Net investment income $ 754 $ 594 $ 1,477 $ 1,056
We consider investment income as a component of our aggregate insurance operating results. However, we consider investment gains and losses, whether realized or unrealized, as non-operating.
25

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Oil and Gas
A summary of revenues and earnings of our oil and gas operations follows.
Second Quarter First Six Months
2024 2023 2024 2023
Oil and gas revenues $ 8,671 $ 10,741 $ 18,181 $ 22,964
Oil and gas production costs 4,282 3,512 8,781 8,983
Depreciation, depletion and accretion 1,878 2,901 4,670 5,751
Gain on sale of properties (16,165) — (16,646) —
General and administrative expenses 1,325 1,438 2,559 3,237
Earnings before income taxes 17,351 2,890 18,817 4,993
Income tax expense 3,982 740 4,299 1,173
Contribution to net earnings $ 13,369 $ 2,150 $ 14,518 $ 3,820
Our oil and gas business is highly dependent on oil and natural gas prices. The lower natural gas prices and lower production during 2024 caused decreases in revenues and production costs. Production decreases were primarily because several gas wells were shut-in along with the natural depletion of oil and gas reserves.
During the first six months of 2024, Abraxas Petroleum recorded a gain of $16,646 as a result of selling undeveloped reserves to an unaffiliated party whose aim is to conduct development activities; however, Abraxas Petroleum will not be required to fund any exploration expenditures on its undeveloped properties. During the third quarter of 2023, Abraxas Petroleum entered into a similar royalty-based arrangement on its undeveloped properties.
Abraxas Petroleum
Abraxas Petroleum operates oil and gas properties in the Permian Basin of West Texas. Earnings for Abraxas Petroleum are summarized below.
Second Quarter First Six Months
2024 2023 2024 2023
Oil and gas revenues $ 4,992 $ 5,931 $ 10,860 $ 13,183
Oil and gas production costs 2,266 1,644 5,085 4,775
Depreciation, depletion and accretion 781 1,733 2,328 3,399
Gain on sale of properties (16,165) — (16,646) —
General and administrative expenses 696 709 1,292 1,955
Earnings before income taxes 17,414 1,845 18,801 3,054
Income tax expense 4,013 424 4,332 702
Contribution to net earnings $ 13,401 $ 1,421 $ 14,469 $ 2,352


26

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Southern Oil
Southern Oil primarily operates oil and natural gas properties offshore in the shallow waters of the Gulf of Mexico.  Earnings for Southern Oil are summarized below.
Second Quarter First Six Months
2024 2023 2024 2023
Oil and gas revenues $ 3,679 $ 4,810 $ 7,321 $ 9,781
Oil and gas production costs 2,016 1,868 3,696 4,208
Depreciation, depletion and accretion 1,097 1,168 2,342 2,352
General and administrative expenses 629 729 1,267 1,282
Earnings (loss) before income taxes (63) 1,045 16 1,939
Income tax expense (benefit) (31) 316 (33) 471
Contribution to net earnings (loss) $ (32) $ 729 $ 49 $ 1,468

Brand Licensing
Maxim’s business lies principally in licensing and media. Earnings of operations are summarized below.
Second Quarter First Six Months
2024 2023 2024 2023
Licensing and media revenue $ 301 $ 761 $ 513 $ 1,356
Licensing and media costs 523 499 1,026 951
General and administrative expenses 33 54 96 75
Earnings (loss) before income taxes (255) 208 (609) 330
Income tax expense (benefit) (62) 52 (151) 83
Contribution to net earnings (loss) $ (193) $ 156 $ (458) $ 247
Licensing revenue was lower during 2024 as compared to 2023 primarily due to fewer licensing events in the first six months of 2024.
We acquired Maxim with the idea of transforming its business model.  The magazine developed the Maxim brand, a franchise we are utilizing to generate nonmagazine revenue, notably through licensing, a cash-generating business related to consumer products, services, and events.
Investment Gains and Investment Partnership Gains
Investment losses net of tax for the second quarter of 2024 were $2,159 as compared to investment gains net of tax for the second quarter of 2023 of $276. Investment losses net of tax for the first six months of 2024 were $827 as compared to investment gains net of tax for the first six months of 2023 of $3,141. Dividends earned on investments are reported as investment income by our insurance companies. We consider investment income as a component of our aggregate insurance operating results. However, we consider investment gains and losses, whether realized or unrealized, as non-operating.
Earnings (loss) from our investments in partnerships are summarized below.
Second Quarter First Six Months
2024 2023 2024 2023
Investment partnership gains (losses) $ (79,890) $ (7,496) $ (57,905) $ 65,092
Tax expense (benefit) (19,142) (1,997) (14,305) 14,562
Contribution to net earnings (loss) $ (60,748) $ (5,499) $ (43,600) $ 50,530
27

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Investment partnership gains include gains/losses from changes in market values of underlying investments and dividends earned by the partnerships.  Dividend income has a lower effective tax rate than income from capital gains. These gains and losses have caused and will continue to cause significant volatility in our periodic earnings.
The investment partnerships hold the Company’s common stock as investments. The Company’s pro-rata share of its common stock held by the investment partnerships is recorded as treasury stock even though these shares are legally outstanding. Gains and losses on Company common stock included in the earnings of the partnerships are eliminated in the Company’s consolidated financial results.
Investment gains and losses in 2024 and 2023 were mainly derived from our investments in equity securities and included unrealized gains and losses from market price changes during the period. We believe that investment and derivative gains/losses are generally meaningless for analytical purposes in understanding our quarterly and annual results.
Interest Expense
The Company’s interest expense is summarized below.
Second Quarter First Six Months
2024 2023 2024 2023
Interest expense on notes payable $ 42 $ 40 $ 42 $ 207
Tax benefit 10 9 10 47
Interest expense net of tax $ 32 $ 31 $ 32 $ 160

On September 13, 2022, Biglari Holdings entered into a line of credit in an aggregate principal amount of up to $30,000. There was no balance on the line of credit on June 30, 2024, or December 31, 2023.
Corporate and Other
Corporate expenses exclude the activities of the restaurant, insurance, brand licensing, and oil and gas businesses. Corporate and other net losses during the second quarter and first six months of 2024 decreased as compared to the same periods in 2023 because of lower incentive fees accrued.
Income Taxes
Income tax benefit for the second quarter of 2024 was $14,725 compared to income tax expense of $1,018 for the second quarter of 2023. Income tax benefit for the first six months of 2024 was $7,909 compared to income tax expense of $20,756 for the first six months of 2023. The variance in income taxes between 2024 and 2023 is attributable to taxes on income generated by the investment partnerships. Investment partnership pre-tax losses were $79,890 during the second quarter of 2024 compared to pre-tax losses of $7,496 during the second quarter of 2023. Investment partnership pre-tax losses were $57,905 during the first six months of 2024 compared to pre-tax gains of $65,092 during the first six months of 2023.
Financial Condition
Consolidated cash and investments are summarized below.
June 30,
2024 		December 31, 2023
Cash and cash equivalents $ 26,897 $ 28,066
Investments 93,619 91,879
Fair value of interest in investment partnerships 482,051 472,772
Total cash and investments 602,567 592,717
Less: portion of Company stock held by investment partnerships (323,320) (273,669)
Carrying value of cash and investments on balance sheet $ 279,247 $ 319,048
Unrealized gains/losses of Biglari Holdings’ stock held by the investment partnerships are eliminated in the Company’s consolidated financial results.
28

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Liquidity
Our balance sheet continues to maintain significant liquidity.  Consolidated cash flow activities are summarized below.
First Six Months
2024 2023
Net cash provided by operating activities $ 20,910 $ 31,518
Net cash used in investing activities (19,586) (28,474)
Net cash used in financing activities (2,691) (9,478)
Effect of exchange rate changes on cash (7) 98
Decrease in cash, cash equivalents and restricted cash $ (1,374) $ (6,336)
In 2024, cash from operating activities decreased by $10,608 as compared to 2023. The change was primarily attributable to a decrease in cash flows from Steak n Shake’s operations.
Cash used in investing activities decreased during 2024 by $8,888 as compared to 2023 primarily due to an increase in proceeds from property and equipment disposals.
Cash used in financing activities decreased during 2024 by $6,787 as compared to 2023 primarily due to principal payments on the Company’s line of credit in 2023.
Biglari Holdings Line of Credit
Biglari Holdings line of credit is $30,000. The line of credit matures on September 12, 2024. The line of credit includes customary covenants, as well as financial maintenance covenants. As of June 30, 2024, we were in compliance with all covenants. There was no balance on the line of credit on June 30, 2024, or December 31, 2023.
Western Sizzlin Revolver
Western Sizzlin’s available line of credit is $500. As of 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.
Critical Accounting Policies
Management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. Certain accounting policies require management to make estimates and judgments concerning transactions that will be settled several years in the future. Amounts recognized in our consolidated financial statements from such estimates are necessarily based on numerous assumptions involving varying and potentially significant degrees of judgment and uncertainty. Accordingly, the amounts currently reflected in our consolidated financial statements will likely increase or decrease in the future as additional information becomes available.  There have been no material changes to critical accounting policies previously disclosed in our annual report on Form 10-K for the year ended December 31, 2023.
Recently Issued Accounting Pronouncements
No recently issued accounting pronouncements were applicable for this Quarterly Report on Form 10-Q.

29

Cautionary Note Regarding Forward-Looking Statements
This report includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In general, forward-looking statements include estimates of future revenues, cash flows, capital expenditures, or other financial items, and assumptions underlying any of the foregoing. Forward-looking statements reflect management’s current expectations regarding future events and use words such as “anticipate,” “believe,” “expect,” “may,” and other similar terminology. A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. Investors should not place undue reliance on the forward-looking statements, which speak only as of the date of this report. These forward-looking statements are all based on currently available operating, financial, and competitive information and are subject to various risks and uncertainties. Our actual future results and trends may differ materially depending on a variety of factors, many beyond our control, including, but not limited to, the risks and uncertainties described in Item 1A, Risk Factors of our annual report on Form 10-K and Item 1A of this report. We undertake no obligation to publicly update or revise them, except as may be required by law.
30

Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 4. Controls and Procedures
Based on an evaluation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), our Chief Executive Officer and Controller have concluded that our disclosure controls and procedures were effective as of June 30, 2024.
There have been no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2024 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Information in response to this Item is included in Note 13 to the Consolidated Financial Statements included in Part 1, Item 1 of this Form 10-Q and is incorporated herein by reference.
ITEM 1A. RISK FACTORS
There have been no material changes from the risk factors as previously disclosed in Item 1A to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
31

ITEM 6. EXHIBITS
Exhibit Number Description
101 Interactive Data Files.
104 Cover page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101)
_________________
* Furnished herewith.

32

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Biglari Holdings Inc.
Date: August 9, 2024 By:
/s/ B RUCE L EWIS
Bruce Lewis
Controller

33
TABLE OF CONTENTS
Part 1 Financial InformationItem 1. Financial StatementsNote 1. Summary Of Significant Accounting PoliciesNote 2. Earnings Per ShareNote 2. Earnings Per Share (continued)Note 3. InvestmentsNote 4. Investment PartnershipsNote 4. Investment Partnerships (continued)Note 5. Property and EquipmentNote 6. Goodwill and Other Intangible AssetsNote 7. Restaurant Operations RevenuesNote 7. Restaurant Operations Revenues (continued)Note 8. Accounts Payable and Accrued ExpensesNote 9. Lines Of CreditNote 10. Unpaid Losses and Loss Adjustment ExpensesNote 11. Lease Assets and ObligationsNote 11. Lease Assets and Obligations (continued)Note 12. Income TaxesNote 13. Commitments and ContingenciesNote 14. Fair Value Of Financial AssetsNote 14. Fair Value Of Financial Assets (continued)Note 15. Related Party TransactionsNote 16. Business Segment ReportingNote 16. Business Segment Reporting (continued)Item 2. Management S Discussion and Analysis Of Financial Condition and Results Of OperationsItem 2. Management S Discussion and Analysis Of Financial Condition and Results Of Operations (continued)Item 3. Quantitative and Qualitative Disclosures About Market RiskItem 4. Controls and ProceduresPart II Other InformationItem 1. Legal ProceedingsItem 1A. Risk FactorsItem 2. Unregistered Sales Of Equity Securities and Use Of ProceedsItem 3. Defaults Upon Senior SecuritiesItem 4. Mine Safety DisclosuresItem 5. Other InformationItem 6. Exhibits

Exhibits

31.01* Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.02* Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.01* Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.