NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2017
(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. (“Biglari Holdings” or the “Company”) 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 entire fiscal 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, 2016.
Biglari Holdings is a holding company
owning subsidiaries engaged in a number of diverse business activities, including media, property and casualty insurance, and restaurants.
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. The Company’s long-term objective
is to maximize per-share intrinsic value. All major operating, investment, and capital allocation decisions are made for the Company
and its subsidiaries by Mr. Biglari. As of September 30, 2017, Mr. Biglari’s beneficial ownership of the Company’s
outstanding common stock was approximately 51.3%.
Principles of Consolidation
The consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiaries including Steak n Shake Inc. (“Steak n Shake”),
Western Sizzlin Corporation (“Western”), Maxim Inc. (“Maxim”) and First Guard Insurance Company and its
agency, 1st Guard Corporation (collectively “First Guard”). Intercompany accounts and transactions have been
eliminated in consolidation.
Business Acquisitions
On May 25, 2017, the Company announced
an agreement for a subsidiary of Biglari Holdings to acquire all of the outstanding shares of the parent company of Pacific Specialty
Insurance Company, Western Service Contract Corp., and its affiliated agency, McGraw Insurance, Inc. The Company is engaged in
discussions to amend the original agreement dated May 22, 2017. There is no assurance that the parties will reach agreement on
the terms of an amendment or proceed with a transaction. Pacific Specialty Insurance Company specializes in power sports, residential
property and personal liability insurance.
Note 2. New Accounting Standards
In January 2017, the Financial Accounting
Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04,
Intangibles - Goodwill
and Other: Simplifying the Test for Goodwill Impairment.
ASU 2017-04 provides for the elimination of Step 2 from the goodwill
impairment test. If impairment charges are recognized, the amount recorded will be the amount by which the carrying amount exceeds
the reporting unit’s fair value with certain limitations. The ASU is effective for public companies for annual periods, and
interim periods within those annual periods, beginning after December 15, 2020. The Company does not currently anticipate ASU 2017-04
will have a material impact on the consolidated financial statements.
In November 2016, the FASB issued ASU
2016-18,
Statement of Cash Flows: Restricted Cash
. ASU 2016-18 requires that the statement of cash flows include restricted
cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on statements of cash
flows. For public entities, this standard is effective for fiscal years beginning after December 15, 2017. This standard should
be applied retrospectively and early adoption is permitted, including adoption in an interim period. We adopted this standard
in 2017 and have retroactively adjusted the consolidated statements of cash flows for all periods presented.
Note 2. New Accounting Standards
(continued)
Cash as reported on the statements
of cash flows consists of the following.
|
|
September 30,
|
|
|
2017
|
|
2016
|
Cash and cash equivalents
|
|
$
|
53,670
|
|
|
$
|
75,405
|
|
Restricted cash included in other long-term assets
|
|
|
8,653
|
|
|
|
25
|
|
Cash, cash equivalents and restricted cash
|
|
$
|
62,323
|
|
|
$
|
75,430
|
|
During the third quarter of 2017, the
Company deposited $8,628 to satisfy required collateral for casualty insurance.
In October 2016, the FASB issued ASU
2016-17,
Interests Held through Related Parties That Are under Common Control.
ASU 2016-17 amends the consolidation guidance
in ASU 2015-02 regarding the treatment of indirect interests held through related parties that are under common control. The amendments
in this update are effective for annual reporting periods beginning after December 15, 2016 and interim periods within those
years. The Company adopted the provisions of ASU 2016-17 on January 1, 2017. The adoption of this update has had no material effect
on the Company’s financial statements.
In August 2016, the FASB issued ASU
2016-15,
Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments.
The objective of the update
is to reduce diversity in how certain transactions are classified in the statement of cash flows. The amendments in this update
are effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those
fiscal years. The Company does not currently anticipate ASU 2016-15 will have a material impact on the consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13,
Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments
. ASU 2016-13 amends guidance
on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For available for sale
debt securities, credit losses should be measured in a manner similar to current GAAP; however ASU 2016-13 will require that credit
losses be presented as an allowance rather than as a write-down. The amendments in this update are effective for financial statements
issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company is currently
evaluating the impact the adoption of ASU 2016-13 will have on its consolidated financial statements and related disclosures.
In February 2016, the FASB issued ASU
2016-02,
Leases
. ASU 2016-02 requires a lessee to recognize lease assets and lease liabilities on the balance sheet, along
with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for annual and interim periods beginning after
December 15, 2018, with early adoption permitted. We are currently evaluating the effect this amended guidance will have on our
results of operations. We anticipate the ASU will have a material impact on our balance sheet, but the ASU is non-cash in nature
and will not affect our cash position.
In May 2014, the FASB issued ASU 2014-09,
Revenue from Contracts with Customers
. The framework prescribed by ASU 2014-09 includes (a) identifying the contract, (b)
identifying the related performance obligations, (c) determining the transaction price, (d) allocating the transaction price to
the identified performance obligations and (e) recognizing revenues as the identified performance obligations are satisfied. The
guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising
from customer contracts. The guidance will be effective for our first quarter 2018 financial statements. Based on our evaluations
to date, we do not currently believe the adoption of ASU 2014-09 will have a material effect on our consolidated financial statements.
However, timing of the recognition of revenue and related costs may change with respect to certain of our contracts with customers.
For instance, revenues for certain contracts may be recognized over time rather than when the service is delivered, as is the current
practice. Our evaluations of these and other issues and implementation efforts concerning ASU 2014-09 are ongoing and also include
consideration of the new disclosure requirements. We expect to adopt ASU 2014-09 as of January 1, 2018 under the modified retrospective
method.
Note 3. 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.
On September 16, 2017, The Lion Fund
II, L.P. entered into a Rule 10b5-1 Trading Plan to purchase up to an aggregate of 80,000 shares of Biglari Holdings common stock
at prevailing market prices. No shares were purchased during the third quarter of 2017. All of the shares to be purchased under
the trading plan will remain legally outstanding.
The following table presents a reconciliation
of basic and diluted weighted average common shares.
|
|
Third Quarter
|
|
First Nine Months
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Basic earnings per share:
|
|
|
|
|
|
|
|
|
Weighted average common shares
|
|
|
1,229,601
|
|
|
|
1,215,296
|
|
|
|
1,231,209
|
|
|
|
1,227,624
|
|
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
|
|
|
1,229,601
|
|
|
|
1,215,296
|
|
|
|
1,231,209
|
|
|
|
1,227,624
|
|
Dilutive effect of stock awards
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,311
|
|
Weighted average common and incremental shares
|
|
|
1,229,601
|
|
|
|
1,215,296
|
|
|
|
1,231,209
|
|
|
|
1,228,935
|
|
Anti-dilutive stock awards
exclude from the calculation of earnings per share
|
|
|
1,480
|
|
|
|
3,177
|
|
|
|
1,480
|
|
|
|
—
|
|
The Company’s common stock is
$0.50 stated value. The following table presents shares authorized, issued and outstanding.
|
|
September 30,
2017
|
|
December 31,
2016
|
Common stock authorized
|
|
|
2,500,000
|
|
|
|
2,500,000
|
|
|
|
|
|
|
|
|
|
|
Common stock issued
|
|
|
2,142,202
|
|
|
|
2,142,202
|
|
Treasury stock held by the Company
|
|
|
(74,589
|
)
|
|
|
(75,009
|
)
|
Outstanding shares
|
|
|
2,067,613
|
|
|
|
2,067,193
|
|
Proportional ownership of the Company's common stock in investment partnerships
|
|
|
(842,103
|
)
|
|
|
(834,889
|
)
|
Net outstanding shares for financial reporting purposes
|
|
|
1,225,510
|
|
|
|
1,232,304
|
|
Note 4. Investments
Investments consisted of the following.
|
|
September 30,
2017
|
|
December 31,
2016
|
Cost
|
|
$
|
23,172
|
|
|
$
|
22,508
|
|
Gross unrealized gains
|
|
|
49
|
|
|
|
24
|
|
Gross unrealized losses
|
|
|
—
|
|
|
|
(235
|
)
|
Fair value
|
|
$
|
23,221
|
|
|
$
|
22,297
|
|
Investment gains/losses are recognized
when investments are sold (as determined on a specific identification basis) or as otherwise required by GAAP. The timing of realized
gains and losses from sales can have a material effect on periodic earnings. However, such realized gains or losses usually have
little, if any, impact on total shareholders’ equity because the investments are carried at fair value with any unrealized
gains/losses included as a component of accumulated other comprehensive income in shareholders’ equity. We believe that
realized investment gains/losses are often meaningless in terms of understanding reported results. Short-term investment gains/losses
have caused and may continue to cause volatility in our results.
Investments in equity securities and
a related put option of $4,463 are included in other assets and recorded at fair value.
Note 5. 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 they 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.
The fair value and adjustment for Company
common stock held by the investment partnerships to determine carrying value of our partnership interest is presented below.
|
|
Fair Value
|
|
Company Common Stock
|
|
Carrying Value
|
Partnership interest at December 31, 2016
|
|
$
|
972,707
|
|
|
$
|
395,070
|
|
|
$
|
577,637
|
|
Investment partnership gains (losses)
|
|
|
(149,171
|
)
|
|
|
(117,582
|
)
|
|
|
(31,589
|
)
|
Contributions (net of distributions) to investment partnerships
|
|
|
(5,688
|
)
|
|
|
|
|
|
|
(5,688
|
)
|
Increase in proportionate share of Company stock held
|
|
|
|
|
|
|
3,176
|
|
|
|
(3,176
|
)
|
Partnership interest at September 30, 2017
|
|
$
|
817,848
|
|
|
$
|
280,664
|
|
|
$
|
537,184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair
Value
|
|
|
|
Company
Common Stock
|
|
|
|
Carrying
Value
|
|
Partnership interest at December 31, 2015
|
|
$
|
734,668
|
|
|
$
|
262,979
|
|
|
$
|
471,689
|
|
Investment partnership gains
|
|
|
114,088
|
|
|
|
92,180
|
|
|
|
21,908
|
|
Contributions (net of distributions) to investment partnerships
|
|
|
(10,896
|
)
|
|
|
|
|
|
|
(10,896
|
)
|
Increase in proportionate share of Company stock held
|
|
|
|
|
|
|
19,807
|
|
|
|
(19,807
|
)
|
Partnership interest at September 30, 2016
|
|
$
|
837,860
|
|
|
$
|
374,966
|
|
|
$
|
462,894
|
|
The carrying value of the investment partnerships net of
deferred taxes is presented below.
|
|
September 30,
2017
|
|
December 31,
2016
|
Carrying value of investment partnerships
|
|
$
|
537,184
|
|
|
$
|
577,637
|
|
Deferred tax liability related to investment partnerships
|
|
|
(134,826
|
)
|
|
|
(155,553
|
)
|
Carrying value of investment partnerships net of deferred taxes
|
|
$
|
402,358
|
|
|
$
|
422,084
|
|
The Company’s proportionate share
of Company stock held by investment partnerships at cost is $345,222 and $341,930 at September 30, 2017 and December 31, 2016,
respectively, and is recorded as treasury stock.
The carrying value of the partnership
interest approximates fair value adjusted by the value of held Company stock. Fair value is according to our proportional ownership
interest of the fair value of investments held by the investment partnerships. The fair value measurement is classified as level
3 within the fair value hierarchy.
Gains (losses) from investment partnerships recorded in the
Company’s consolidated statements of earnings are presented below.
|
|
Third Quarter
|
|
First Nine Months
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Investment partnership gains (losses)
|
|
$
|
(43,859
|
)
|
|
$
|
(108,614
|
)
|
|
$
|
(31,589
|
)
|
|
$
|
21,908
|
|
Loss on contribution of securities to investment partnership
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(306
|
)
|
Investment partnership gains (losses)
|
|
|
(43,859
|
)
|
|
|
(108,614
|
)
|
|
|
(31,589
|
)
|
|
|
21,602
|
|
Tax expense (benefit)
|
|
|
(20,733
|
)
|
|
|
(44,383
|
)
|
|
|
(16,951
|
)
|
|
|
2,373
|
|
Contribution to net earnings
|
|
$
|
(23,126
|
)
|
|
$
|
(64,231
|
)
|
|
$
|
(14,638
|
)
|
|
$
|
19,229
|
|
Note 5. Investment Partnerships
(continued)
On December 31 of each year, the general
partner of the investment partnerships, Biglari Capital Corp. (“Biglari Capital”), will earn an incentive reallocation
fee for the Company’s investments equal to 25% of the net profits above a hurdle rate of 6% over the previous high-water
mark. Our policy is to accrue an estimated incentive fee throughout the year. The Company did not accrue an incentive fee during
the first nine months of 2017. During the first nine months of 2016, the Company accrued incentive fees for Biglari Capital of
$191. Our investments in these partnerships are committed on a rolling 5-year basis. Biglari Capital is an entity solely owned
by Mr. Biglari.
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, 2017
|
|
|
$
|
170,543
|
|
|
$
|
963,458
|
|
|
Total
liabilities as of September 30, 2017
|
|
|
$
|
382
|
|
|
$
|
200,924
|
|
|
Revenue
for the first nine months ended September 30, 2017
|
|
|
$
|
(47,656
|
)
|
|
$
|
(89,110
|
)
|
|
Earnings
(loss) for the first nine months ended September 30, 2017
|
|
|
$
|
(47,703
|
)
|
|
$
|
(127,970
|
)
|
|
Biglari
Holdings’ ownership interest as of September 30, 2017
|
|
|
|
63.9
|
%
|
|
|
93.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets as of December 31, 2016
|
|
|
$
|
221,676
|
|
|
$
|
1,109,465
|
|
|
Total liabilities as of December 31, 2016
|
|
|
$
|
2,694
|
|
|
$
|
201,460
|
|
|
Revenue for the first nine months ended September 30, 2016
|
|
|
$
|
23,926
|
|
|
$
|
112,715
|
|
|
Earnings for the first nine months ended September 30, 2016
|
|
|
$
|
23,792
|
|
|
$
|
108,327
|
|
|
Biglari Holdings’ ownership interest as of September 30, 2016
|
|
|
|
64.9
|
%
|
|
|
95.2
|
%
|
Revenue in the above summarized financial
information of the investment partnerships includes investment income and unrealized gains and losses on investments. The investments
held by the investment partnerships are largely concentrated in the common stock of one investee, Cracker Barrel Old Country Store,
Inc.
Note 6. Property and Equipment
Property and equipment is composed of
the following.
|
|
September 30,
2017
|
|
December 31,
2016
|
Land
|
|
$
|
157,073
|
|
|
$
|
160,328
|
|
Buildings
|
|
|
152,893
|
|
|
|
156,723
|
|
Land and leasehold improvements
|
|
|
163,632
|
|
|
|
163,817
|
|
Equipment
|
|
|
204,558
|
|
|
|
200,214
|
|
Construction in progress
|
|
|
1,695
|
|
|
|
1,539
|
|
|
|
|
679,851
|
|
|
|
682,621
|
|
Less accumulated depreciation and amortization
|
|
|
(379,358
|
)
|
|
|
(370,357
|
)
|
Property and equipment, net
|
|
$
|
300,493
|
|
|
$
|
312,264
|
|
Note 7. 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.
|
|
Restaurants
|
|
Other
|
|
Total
|
Goodwill at December 31, 2016
|
|
$
|
28,090
|
|
|
$
|
11,913
|
|
|
$
|
40,003
|
|
Change in foreign exchange rates during first nine months 2017
|
|
|
69
|
|
|
|
—
|
|
|
|
69
|
|
Goodwill at September 30, 2017
|
|
$
|
28,159
|
|
|
$
|
11,913
|
|
|
$
|
40,072
|
|
We are required to assess goodwill and
any indefinite-lived intangible assets for impairment annually, or more frequently if circumstances indicate impairment may have
occurred. When evaluating goodwill for impairment, we may first perform a qualitative assessment to determine whether it is more
likely than not that a reporting unit is impaired. If we do not perform a qualitative assessment, or if we determine that it is
not more likely than not that the fair value of the reporting unit exceeds its carrying amount, we test for potential impairment
using a two-step approach. The first is the estimation of fair value of each reporting unit. If step one indicates that impairment
potentially exists, the second step is performed to measure the amount of impairment, if any. Goodwill impairment occurs when the
estimated fair value of goodwill is less than its carrying value.
The valuation methodology and underlying
financial information included in our determination of fair value require significant management judgments. We use both market
and income approaches to derive fair value. The judgments in these two approaches include, but are not limited to, comparable market
multiples, long-term projections of future financial performance, and the selection of appropriate discount rates used to determine
the present value of future cash flows. Changes in such estimates or the application of alternative assumptions could produce significantly
different results. No impairment charges for goodwill were recorded in the first nine months of 2017 or 2016.
Other Intangible Assets
Other intangible assets are composed
of the following.
|
|
September 30, 2017
|
|
December 31, 2016
|
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Total
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Total
|
Franchise agreement
|
|
$
|
5,310
|
|
|
$
|
(3,983
|
)
|
|
$
|
1,327
|
|
|
$
|
5,310
|
|
|
$
|
(3,585
|
)
|
|
$
|
1,725
|
|
Other
|
|
|
810
|
|
|
|
(735
|
)
|
|
|
75
|
|
|
|
810
|
|
|
|
(707
|
)
|
|
|
103
|
|
Total
|
|
|
6,120
|
|
|
|
(4,718
|
)
|
|
|
1,402
|
|
|
|
6,120
|
|
|
|
(4,292
|
)
|
|
|
1,828
|
|
Intangible assets with indefinite lives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade names
|
|
|
15,876
|
|
|
|
—
|
|
|
|
15,876
|
|
|
|
15,876
|
|
|
|
—
|
|
|
|
15,876
|
|
Other assets with indefinite lives
|
|
|
9,301
|
|
|
|
—
|
|
|
|
9,301
|
|
|
|
8,347
|
|
|
|
—
|
|
|
|
8,347
|
|
Total intangible assets
|
|
$
|
31,297
|
|
|
$
|
(4,718
|
)
|
|
$
|
26,579
|
|
|
$
|
30,343
|
|
|
$
|
(4,292
|
)
|
|
$
|
26,051
|
|
Intangible assets subject to amortization
consist of franchise agreements connected with the purchase of Western as well as rights to favorable leases related to prior acquisitions.
These intangible assets are being amortized over their estimated weighted average of useful lives ranging from eight to twelve
years.
Amortization expense for each of the
first nine months of 2017 and 2016 was $426 and $428, respectively. The Company’s intangible assets with definite lives will
fully amortize in 2020. Total annual amortization expense for each of 2018 and 2019 is expected to be approximately $500.
Intangible assets with indefinite lives
consist of trade names, franchise rights as well as lease rights.
The Company consolidated goodwill and
other intangible assets into a single line item on the balance sheet at September 30, 2017 and changed the December 31, 2016 presentation
to conform.
Note 8. Restaurant Operations Revenues
Restaurant operations revenues were
as follows.
|
|
Third Quarter
|
|
First Nine Months
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net sales
|
|
$
|
199,980
|
|
|
$
|
203,701
|
|
|
$
|
587,532
|
|
|
$
|
603,850
|
|
Franchise royalties and fees
|
|
|
5,125
|
|
|
|
4,962
|
|
|
|
16,030
|
|
|
|
14,096
|
|
Other
|
|
|
967
|
|
|
|
782
|
|
|
|
3,071
|
|
|
|
2,503
|
|
|
|
$
|
206,072
|
|
|
$
|
209,445
|
|
|
$
|
606,633
|
|
|
$
|
620,449
|
|
Note 9. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses
include the following.
|
|
September 30,
2017
|
|
December 31,
2016
|
Accounts payable
|
|
$
|
37,872
|
|
|
$
|
33,961
|
|
Gift card liability
|
|
|
20,648
|
|
|
|
25,321
|
|
Salaries, wages, and vacation
|
|
|
10,482
|
|
|
|
15,618
|
|
Taxes payable
|
|
|
14,627
|
|
|
|
12,254
|
|
Workers' compensation and other self-insurance accruals
|
|
|
10,250
|
|
|
|
9,960
|
|
Deferred revenue
|
|
|
8,074
|
|
|
|
7,407
|
|
Other
|
|
|
9,571
|
|
|
|
8,361
|
|
Accounts payable and accrued expenses
|
|
$
|
111,524
|
|
|
$
|
112,882
|
|
Note 10. Borrowings
Notes payable and other borrowings include the following.
Current portion of notes payable and other borrowings
|
|
September 30,
2017
|
|
December 31,
2016
|
Notes payable
|
|
$
|
2,200
|
|
|
$
|
2,200
|
|
Unamortized original issue discount
|
|
|
(318
|
)
|
|
|
(308
|
)
|
Unamortized debt issuance costs
|
|
|
(654
|
)
|
|
|
(711
|
)
|
Obligations under leases
|
|
|
5,543
|
|
|
|
5,571
|
|
Western revolver
|
|
|
215
|
|
|
|
377
|
|
Total current portion of notes payable and other borrowings
|
|
$
|
6,986
|
|
|
$
|
7,129
|
|
|
|
|
|
|
|
|
|
|
Long-term notes payable and other borrowings
|
|
|
|
|
|
|
|
|
Notes payable
|
|
$
|
184,248
|
|
|
$
|
200,898
|
|
Unamortized original issue discount
|
|
|
(854
|
)
|
|
|
(1,093
|
)
|
Unamortized debt issuance costs
|
|
|
(1,590
|
)
|
|
|
(2,177
|
)
|
Obligations under leases
|
|
|
77,129
|
|
|
|
83,927
|
|
Total long-term notes payable and other borrowings
|
|
$
|
258,933
|
|
|
$
|
281,555
|
|
Steak n Shake Credit Facility
On March 19, 2014, Steak n Shake and
its subsidiaries entered into the current credit agreement. The credit agreement provides for a senior secured term loan facility
in an aggregate principal amount of $220,000. On August 3, 2017, Steak n Shake and its lenders amended the senior secured revolving
credit facility, reducing the revolving commitments from $30,000 to $15,000.
The term loan is scheduled to mature
on March 19, 2021. It amortizes at an annual rate of 1.0% in equal quarterly installments, beginning June 30, 2014, at 0.25% of
the original principal amount of the term loan, subject to mandatory prepayments from excess cash flow, asset sales and other events
described in the credit agreement. The balance will be due at maturity.
Note 10. Borrowings
(continued)
Steak n Shake has the right to request
an incremental term loan facility from participating lenders and/or eligible assignees at any time, up to an aggregate total principal
amount not to exceed $70,000 if certain customary conditions within the credit agreement are met.
Borrowings bear interest at a rate per
annum equal to a base rate or a Eurodollar rate (minimum of 1%) plus an applicable margin. Interest on the term loan is based on
a Eurodollar rate plus an applicable margin of 3.75% or on the prime rate plus an applicable margin of 2.75%. Interest on loans
under the revolver is based on a Eurodollar rate plus an applicable margin ranging from 2.75% to 4.25% or on the prime rate plus
an applicable margin ranging from 1.75% to 3.25%. The applicable margins on revolver loans are contingent on Steak n Shake’s
total leverage ratio.
The interest rate on the term loan was
4.99% as of September 30, 2017.
The credit agreement includes customary
affirmative and negative covenants and events of default, as well as a financial maintenance covenant, solely with respect to the
revolver, relating to the maximum total leverage ratio. The total leverage ratio is defined as the ratio of (i) total debt minus
unrestricted cash in relation to (ii) earnings before interest, taxes, depreciation and amortization. The testing of the total
leverage ratio is not applicable when the revolving credit facility is not utilized. Steak n Shake’s credit facility contains
restrictions on its ability to pay dividends to Biglari Holdings.
Both the term loan and the revolver
have been secured by first priority security interests in substantially all the assets of Steak n Shake. Biglari Holdings is not
a guarantor under the credit facility. As of September 30, 2017, $186,448 was outstanding under the term loan, and no amount was
outstanding under the revolver.
During the third quarter of 2017,
Steak n Shake deposited $8,628 to satisfy required collateral for casualty insurance. The collateral was
previously satisfied through standby letters of credit secured by the revolver. As of September 30, 2017, Steak n Shake did
not utilize the revolver to collateralize standby letters of credit. As of December 31, 2016, Steak n Shake utilized the
revolver to collateralize $10,893 in standby letters of credit.
Western Revolver
As of September 30, 2017, Western has
$215 due June 13, 2018.
Fair Value of Debt
The carrying amounts for debt reported
in the consolidated balance sheet did not differ materially from their fair values at September 30, 2017 and December 31, 2016.
The fair value was determined to be a Level 3 fair value measurement.
Note 11. Accumulated Other Comprehensive
Income
During the first nine months of 2017
and 2016, the changes in the balances of each component of accumulated other comprehensive income, net of tax, were as follows.
|
|
Nine months ended September 30, 2017
|
|
Nine months ended September 30, 2016
|
|
|
|
Foreign currency translation adjustments
|
|
|
|
Investment gain (loss)
|
|
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
Foreign currency translation adjustments
|
|
|
|
Investment gain (loss)
|
|
|
|
Accumulated
other
comprehensive income (loss)
|
|
Beginning Balance
|
|
$
|
(3,447
|
)
|
|
$
|
(137
|
)
|
|
$
|
(3,584
|
)
|
|
$
|
(2,992
|
)
|
|
$
|
(687
|
)
|
|
$
|
(3,679
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
|
1,750
|
|
|
|
169
|
|
|
|
1,919
|
|
|
|
163
|
|
|
|
405
|
|
|
|
568
|
|
Reclassification to (earnings) loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
193
|
|
|
|
193
|
|
Ending Balance
|
|
$
|
(1,697
|
)
|
|
$
|
32
|
|
|
$
|
(1,665
|
)
|
|
$
|
(2,829
|
)
|
|
$
|
(89
|
)
|
|
$
|
(2,918
|
)
|
Note 11. Accumulated Other Comprehensive Income
(continued)
During the third quarters of 2017 and 2016, the changes in
the balances of each component of accumulated other comprehensive income, net of tax, were as follows.
|
|
Third Quarter 2017
|
|
Third Quarter 2016
|
|
|
|
Foreign currency translation adjustments
|
|
|
|
Investment gain (loss)
|
|
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
Foreign currency translation adjustments
|
|
|
|
Investment gain (loss)
|
|
|
|
Accumulated other comprehensive income (loss)
|
|
Beginning Balance
|
|
$
|
(2,259
|
)
|
|
$
|
(14
|
)
|
|
$
|
(2,273
|
)
|
|
$
|
(2,871
|
)
|
|
$
|
(126
|
)
|
|
$
|
(2,997
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
|
562
|
|
|
|
46
|
|
|
|
608
|
|
|
|
42
|
|
|
|
37
|
|
|
|
79
|
|
Reclassification to (earnings) loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Ending Balance
|
|
$
|
(1,697
|
)
|
|
$
|
32
|
|
|
$
|
(1,665
|
)
|
|
$
|
(2,829
|
)
|
|
$
|
(89
|
)
|
|
$
|
(2,918
|
)
|
During the first nine months of 2016,
$193 (net of tax) was reclassified from accumulated other comprehensive income to the consolidated statement of earnings. There
were no reclassifications made during 2017.
Note 12. Income Taxes
In determining the quarterly provision
for income taxes, the Company uses an estimated annual effective tax rate based on expected annual income, statutory tax rates,
and available tax planning opportunities in the various jurisdictions in which the Company operates. Unusual or infrequently occurring
items are separately recognized during the quarter in which they occur.
Income tax benefit for the third
quarter of 2017 was $25,226 compared to $44,129 for the third quarter of 2016. Income tax benefit for the first
nine months of 2017 was $21,085 compared to an expense of $5,011 for the first nine months of 2016. The variance in income
taxes between 2017 and 2016 is primarily attributable to taxes on income from investment partnerships and losses generated by
the investment partnerships.
As of September 30, 2017 and December
31, 2016, we had approximately $362 and $396, respectively, of unrecognized tax benefits, which are included in other liabilities
in the consolidated balance sheets.
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 flows.
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.
Note 14. Fair Value of Financial
Assets
(continued)
-
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 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
sheet:
Cash equivalents:
Cash equivalents
primarily consist of money market funds which are classified within Level 1 of the fair value hierarchy.
Equity securities:
The Company’s
investments in equity securities are classified within Level 1 of the fair value hierarchy.
Bonds:
The Company’s investments
in bonds are classified within Level 2 of the fair value hierarchy.
Non-qualified deferred compensation
plan investments:
The assets of the non-qualified plan are set up in a rabbi trust. They represent mutual funds and are classified
within Level 1 of the fair value hierarchy.
Derivative instruments:
Options
related to equity securities are marked to market each reporting period and are classified within Level 2 of the fair value hierarchy.
As of September 30, 2017 and December
31, 2016, the fair values of financial assets were as follows.
|
|
September 30, 2017
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
Level 1
|
|
|
|
Level 2
|
|
|
|
Level 3
|
|
|
|
Total
|
|
|
|
Level 1
|
|
|
|
Level 2
|
|
|
|
Level 3
|
|
|
|
Total
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash equivalents
|
|
$
|
4,288
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,288
|
|
|
$
|
471
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
471
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer goods
|
|
|
2,600
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,600
|
|
|
|
2,018
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,018
|
|
Bonds
|
|
|
—
|
|
|
|
25,831
|
|
|
|
—
|
|
|
|
25,831
|
|
|
|
—
|
|
|
|
24,904
|
|
|
|
—
|
|
|
|
24,904
|
|
Options on equity securities
|
|
|
—
|
|
|
|
1,863
|
|
|
|
—
|
|
|
|
1,863
|
|
|
|
—
|
|
|
|
2,445
|
|
|
|
—
|
|
|
|
2,445
|
|
Non-qualified deferred compensation plan investments
|
|
|
3,233
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,233
|
|
|
|
2,872
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,872
|
|
Total assets at fair value
|
|
$
|
10,121
|
|
|
$
|
27,694
|
|
|
$
|
—
|
|
|
$
|
37,815
|
|
|
$
|
5,361
|
|
|
$
|
27,349
|
|
|
$
|
—
|
|
|
$
|
32,710
|
|
There were no changes in our valuation
techniques used to measure fair values on a recurring basis.
Note 15. Related Party Transactions
Services Agreement
On September 15, 2017, the Company entered
into a services agreement with Biglari Enterprises LLC and Biglari Capital (collectively, the “Biglari Entities”).
The Biglari Entities are owned by Mr. Biglari. The services agreement replaces the shared services agreement between the Company
and Biglari Capital dated July 1, 2013. The services agreement was executed in connection with a review of the relationships and
transactions between the Company and Biglari Capital. After careful consideration, including an assessment by a public accounting
firm of administrative-related costs incurred by the Company in connection with its investments, the Company’s Governance,
Compensation and Nominating Committee, comprised solely of independent board members, approved the services agreement. Under the
terms of the services agreement, the Company will no longer provide business and administrative-related services to Biglari Capital.
Instead, the Biglari Entities will assume the responsibility to provide the services and the Company will pay a fixed fee to the
Biglari Entities.
The services agreement has a five-year
term, effective on October 1, 2017. The fixed fee is $700 per month for the first year with adjustments in years two through five.
The services agreement does not alter the hurdle rate connected with the incentive reallocation paid to Biglari Capital by the
Company.
Investments in The Lion Fund,
L.P. and The Lion Fund II, L.P.
As of September 30, 2017, the Company’s investments in The Lion Fund, L.P. and The Lion Fund II, L.P. had a fair value of
$817,848.
Contributions to and distributions from
The Lion Fund, L.P. and The Lion Fund II, L.P. were as follows.
|
|
Third Quarter
|
|
First Nine Months
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Contributions of cash
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,707
|
|
|
$
|
14,150
|
|
|
Contributions of securities
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,682
|
|
|
Distributions of cash
|
|
|
|
(4,380
|
)
|
|
|
(16,790
|
)
|
|
|
(9,395
|
)
|
|
|
(26,265
|
)
|
|
Distributions of securities
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(4,463
|
)
|
|
|
|
|
$
|
(4,380
|
)
|
|
$
|
(16,790
|
)
|
|
$
|
(5,688
|
)
|
|
$
|
(10,896
|
)
|
As the general partner of the investment
partnerships, Biglari Capital on December 31 of each year will earn an incentive reallocation fee for the Company’s investments
equal to 25% of the net profits above a hurdle rate of 6% over the previous high water mark. Our policy is to accrue
an estimated incentive fee throughout the year. The Company did not accrue incentive fees for Biglari Capital during the first
nine months of 2017. The Company accrued $191 in incentive fees for Biglari Capital during the first nine months of 2016.
Incentive Agreement Amendment
During 2013, Biglari Holdings and Mr.
Biglari entered into an amendment to the Incentive Agreement to exclude earnings by the investment partnerships from the calculation
of Mr. Biglari’s incentive bonus. Under the Amended and Restated Incentive Agreement Mr. Biglari would receive a payment
of approximately $14,700 if an event occurred entitling him to a severance payment.
License Agreement
On January 11, 2013, the Company entered
into a Trademark License Agreement (the “License Agreement”) with Mr. Biglari. The License Agreement was unanimously
approved by the Governance, Nominating and Compensation Committee (comprised of independent members of the Company’s Board
of Directors). In addition, the license under the License Agreement is provided on a royalty-free basis in the absence of specified
extraordinary events described below. Accordingly, the Company and its subsidiaries have paid no royalties to Mr. Biglari under
the License Agreement since its inception.
Note 15. Related Party Transactions
(continued)
Under the License Agreement, Mr.
Biglari granted to the Company an exclusive license to use the Biglari and Biglari Holdings names (the “Licensed
Marks”) in association with various products and services (collectively the “Products and Services”). Upon
(a) the expiration of twenty years from the date of the License Agreement (subject to extension as provided in the License
Agreement), (b) Mr. Biglari’s death, (c) the termination of Mr. Biglari’s employment by the Company for Cause (as
defined in the License Agreement), or (d) Mr. Biglari’s resignation from his employment with the Company absent an
Involuntary Termination Event (as defined in the License Agreement), the Licensed Marks for the Products and Services will
transfer from Mr. Biglari to the Company, without any compensation, if the Company is continuing to use the Licensed Marks in
the ordinary course of its business. Otherwise, the rights will revert to Mr. Biglari.
If (i) a Change of Control (as defined
in the License Agreement) of the Company; (ii) the termination of Mr. Biglari’s employment by the Company without Cause;
or (iii) Mr. Biglari’s resignation from his employment with the Company due to an Involuntary Termination Event (each, a
“Triggering Event”) were to occur, Mr. Biglari would be entitled to receive a 2.5% royalty on “Revenues”
with respect to the “Royalty Period.” The royalty payment to Mr. Biglari would not apply to all revenues received by
Biglari Holdings and its subsidiaries nor would it apply retrospectively (
i.e.
, to revenues received with respect to the
period prior to the Triggering Event). The royalty would apply to revenues recorded by the Company on an accrual basis under GAAP,
solely with respect to the defined period of time after the Triggering Event equal to the Royalty Period, from a covered Product,
Service or business that (1) has used the Biglari Holdings or Biglari name at any time during the term of the License Agreement,
whether prior to or after a Triggering Event, or (2) the Company has specifically identified, prior to a Triggering Event, will
use the name Biglari or Biglari Holdings.
“Revenues” means all revenues
received, on an accrual basis under GAAP, by the Company, its subsidiaries and affiliates from the following: (1) all Products
and Services covered by the License Agreement bearing or associated with the names Biglari and Biglari Holdings at any time (whether
prior to or after a Triggering Event). This category would include, without limitation, the use of Biglari or Biglari Holdings
in the public name of a business providing any covered Product or Service; and (2) all covered Products, Services and businesses
that the Company has specifically identified, prior to a Triggering Event, will bear, use or be associated with the name Biglari
or Biglari Holdings.
The Governance, Nominating and Compensation
Committee unanimously approved the association of the Biglari name and mark with all of Steak n Shake’s restaurants (including
Company operated and franchised locations), products and brands. On May 14, 2013, the Company, Steak n Shake, LLC and Steak n Shake
Enterprises, Inc. entered into a Trademark Sublicense Agreement in connection therewith. Accordingly, revenues received by the
Company, its subsidiaries and affiliates from Steak n Shake’s restaurants, products and brands would come within the definition
of Revenues for purposes of the License Agreement.
The “Royalty Period” is
a defined period of time, after the Triggering Event, calculated as follows: (i) if, following three months after a Triggering
Event, the Company or any of its subsidiaries or affiliates continues to use the Biglari or Biglari Holdings name in connection
with any covered product or service, or continues to use Biglari as part of its corporate or public company name, then the Royalty
Period will equal (a) the period of time during which the Company or any of its subsidiaries or affiliates continues any
such use, plus (b) a period of time after the Company, its subsidiaries and affiliates have ceased all uses of the names Biglari
and Biglari Holdings equal to the length of the term of the License Agreement prior to the Triggering Event, plus three years.
As an example, if a Triggering Event occurs five years after the date of the License Agreement, and the Company ceases all uses
of the Biglari and Biglari Holdings names two years after the Triggering Event, the Royalty Period will equal a total of ten years
(the sum of two years after the Triggering Event during which the Biglari and Biglari Holdings names are being used, plus a period
of time equal to the five years prior to the Triggering Event, plus three years); or (ii) if the Company, its subsidiaries and
affiliates cease all uses of the Biglari and Biglari Holdings names within three months after a Triggering Event, then the Royalty
Period will equal the length of the term of the License Agreement prior to the Triggering Event, plus three years. As an
example, if a Triggering Event occurs five years after the date of the License Agreement, and the Company ceases all uses of the
Biglari and Biglari Holdings names two months after the Triggering Event, the Royalty Period will equal a total of eight years
(the sum of the period of time equal to the five years prior to the Triggering Event, plus three years). Notwithstanding the above
methods of determining the Royalty Period, the minimum Royalty Period is five years after a Triggering Event.
The actual amount of royalties paid
to Mr. Biglari following the occurrence of a Triggering Event (as defined in the License Agreement) would depend on the Company’s
revenues during the applicable period following the Triggering Event, and, therefore, depends on material assumptions and estimates
regarding future operations and revenues. Assuming for purposes of illustration a Triggering Event occurred on December 31, 2016,
using revenue from 2016 as an estimate of future revenue and calculated according to terms of the License Agreement, Mr. Biglari
would receive approximately $20,300 in royalty payments annually. At a minimum, the royalties would be earned on revenue generated
from January 1, 2017 through December 21, 2023. Royalty payments beyond the minimum period would be subject to the licensee's continued
use of the licensed marks.
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 includes Steak
n Shake and Western. The Company also reports segment information for First Guard and Maxim. Other business activities not specifically
identified with reportable business segments are presented in “Other” within total operating businesses. 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.
Revenue and earnings (losses) before
income taxes for the third quarters and first nine months of 2017 and 2016 were as follows.
|
|
Revenue
|
|
|
Third Quarter
|
|
First Nine Months
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Operating Businesses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steak n Shake
|
|
$
|
202,001
|
|
|
$
|
206,248
|
|
|
$
|
596,026
|
|
|
$
|
609,974
|
|
Western
|
|
|
4,071
|
|
|
|
3,197
|
|
|
|
10,607
|
|
|
|
10,475
|
|
Total Restaurant Operations
|
|
|
206,072
|
|
|
|
209,445
|
|
|
|
606,633
|
|
|
|
620,449
|
|
First Guard
|
|
|
6,285
|
|
|
|
5,841
|
|
|
|
18,548
|
|
|
|
17,071
|
|
Maxim
|
|
|
1,877
|
|
|
|
1,446
|
|
|
|
5,400
|
|
|
|
6,567
|
|
|
|
$
|
214,234
|
|
|
$
|
216,732
|
|
|
$
|
630,581
|
|
|
$
|
644,087
|
|
|
|
Earnings (Losses) Before Income Taxes
|
|
|
Third Quarter
|
|
First Nine Months
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Operating Businesses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steak n Shake
|
|
$
|
(3,283
|
)
|
|
$
|
10,443
|
|
|
$
|
1,038
|
|
|
$
|
30,949
|
|
Western
|
|
|
479
|
|
|
|
542
|
|
|
|
1,514
|
|
|
|
1,965
|
|
Total Restaurant Operations
|
|
|
(2,804
|
)
|
|
|
10,985
|
|
|
|
2,552
|
|
|
|
32,914
|
|
First Guard
|
|
|
834
|
|
|
|
1,177
|
|
|
|
3,135
|
|
|
|
4,602
|
|
Maxim
|
|
|
45
|
|
|
|
(2,810
|
)
|
|
|
(487
|
)
|
|
|
(9,646
|
)
|
Other
|
|
|
174
|
|
|
|
139
|
|
|
|
515
|
|
|
|
404
|
|
Total Operating Businesses
|
|
|
(1,751
|
)
|
|
|
9,491
|
|
|
|
5,715
|
|
|
|
28,274
|
|
Corporate and Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
(1,600
|
)
|
|
|
(2,304
|
)
|
|
|
(6,285
|
)
|
|
|
(7,688
|
)
|
Investment partnership gains
|
|
|
(43,859
|
)
|
|
|
(108,614
|
)
|
|
|
(31,589
|
)
|
|
|
21,602
|
|
Total Corporate and Investments
|
|
|
(45,459
|
)
|
|
|
(110,918
|
)
|
|
|
(37,874
|
)
|
|
|
13,914
|
|
Interest expense on notes payable and other borrowings
|
|
|
(2,716
|
)
|
|
|
(2,831
|
)
|
|
|
(8,321
|
)
|
|
|
(8,626
|
)
|
|
|
$
|
(49,926
|
)
|
|
$
|
(104,258
|
)
|
|
$
|
(40,480
|
)
|
|
$
|
33,562
|
|