*Net earnings (loss) per equivalent Class B
share outstanding are one-fifth of the equivalent Class A share or $(0.01) and $18.41 for the third quarter and first nine months
of 2019, respectively, and $(7.90) and $(13.22) for the third quarter and first nine months of 2018, respectively.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2019
(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, 2018.
Biglari Holdings is a holding company owning
subsidiaries engaged in a number of diverse business activities, including property and casualty insurance, media and licensing,
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. 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, 2019, Mr. Biglari’s
beneficial ownership was approximately 60.7% of the Company’s outstanding Class A common stock and 55.4% of the Company’s
outstanding Class B common stock.
Business Acquisition
On September 9, 2019, a wholly-owned subsidiary
of the Company, Southern Oil Company, acquired the stock of Southern Oil of Louisiana Inc. (collectively “Southern Oil”)
for $51,500 in cash. Southern Oil is engaged in the exploration, development, and production of oil and natural gas properties
primarily offshore in the Gulf of Mexico. The Company’s financial results include the results of Southern Oil from the acquisition
date to the end of the third quarter. The revenues and operating results for Southern Oil were not significant to the Company for
the third quarter.
The following table sets forth certain unaudited
pro forma consolidated earnings data for the third quarter and first nine months of 2019 as if the acquisition of Southern Oil
consummated on the same terms at the beginning of 2019.
|
|
Third Quarter
|
|
First Nine Months
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues
|
|
$
|
172,187
|
|
|
$
|
215,794
|
|
|
$
|
562,315
|
|
|
$
|
646,359
|
|
Earnings before income taxes
|
|
$
|
2,538
|
|
|
$
|
(20,617
|
)
|
|
$
|
59,212
|
|
|
$
|
(26,604
|
)
|
Note 1. Summary of Significant Accounting
Policies (continued)
The acquisition date fair values of certain
assets and liabilities of Southern Oil are provisional and subject to revision as the related valuations are completed. Acquisition
related expenses, which consists of external costs directly related to the acquisition of Southern Oil, such as advisory, legal
and other professional fees are expensed as incurred.
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 Sizzlin”), Maxim Inc. (“Maxim”), First Guard Insurance Company (“First
Guard”), and Southern Oil. Intercompany accounts and transactions have been eliminated in consolidation.
Oil and Gas Producing Activities
Revenues are derived from the sale of produced
oil and natural gas. The Company recognizes oil and gas revenue from its interests in wells using the sales method wherein
revenues are recognized based on actual volumes of oil and gas delivered to purchasers. Payments for product sales are received
one to three months after delivery.
The Company follows the successful efforts
method of accounting for its oil and gas properties. Costs of drilling exploratory wells are initially capitalized but are
charged to expense if the well is determined to be unsuccessful. The Company assesses its proved oil and gas properties for
impairment whenever events or circumstances indicate that the carrying value of the assets may not be recoverable.
All property acquisition costs and development
costs are capitalized when incurred and depleted on a unit-of-production basis over the remaining life of proved reserves.
Support equipment and other property and equipment are depreciated over their estimated useful lives.
Acquisition costs of unproved properties are
periodically assessed for impairment and are transferred to proved properties to the extent the costs are associated with the successful
exploration activities. Significant undeveloped leases are assessed individually for impairment, based on the Company’s
current exploration plans, and a valuation allowance is provided if impairment is indicated.
Asset retirement obligations relate to future
costs associated with the plugging and abandonment of oil and gas wells, removal of equipment and facilities from leased acreage
and returning such land to its original condition. The Company determines its asset retirement obligation amounts by calculating
the present value of the estimated future cash outflows associated with its plug and abandonment obligations. The fair value
of a liability for an asset retirement obligation is recorded in the period in which it is incurred and the cost of such liability
increases the carrying amount of the related long-lived asset by the same amount. The liability is accreted each period
through charges to depreciation, depletion and amortization expense, and the capitalized cost is depleted on a unit-of-production
basis over the proved developed reserves of the related asset.
Note 2. New Accounting Standards
In June 2016, the FASB issued Accounting Standards
Update (“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. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842). We adopted ASC 842 “Leases”
on January 1, 2019. Most significantly, ASC 842 requires a lessee to recognize a liability to make lease payments and an asset
with respect to its right to use the underlying asset for the lease term. We applied ASC 840 to all comparative periods which included
a cumulative-effect adjustment of $1,499 to retained earnings on January 1, 2019. Adoption of ASC 842 also resulted in an increase
to total assets and liabilities due to the recording of operating lease assets of $63,261 and operating lease liabilities of $69,671
as of January 1, 2019 and due to the recording of finance lease assets of $11,638 and finance lease liabilities of $11,784. The
difference between the asset and liability amounts primarily relates to previously recorded deferred/prepaid rent. The standard
had a material impact on our consolidated balance sheets but did not have a material impact on our consolidated statements of earnings
and statements of cash flow. The most significant impact was the recognition of right-of-use assets and lease liabilities for operating
leases.
Note 2. New Accounting Standards (continued)
In adopting and applying ASC 842, we elected
the package of practical expedients permitted under the transition guidance within the new standard, which among other things,
allows us to carry forward the historical lease classification. In addition, we elected certain practical expedients and accounting
policies, including an accounting policy election to keep leases with an initial term of 12 months or less from the balance sheet.
We recognize those lease payments in the consolidated statements of earnings on a straight-line basis over the lease term.
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.
The following table presents shares authorized,
issued and outstanding on September 30, 2019 and December 31, 2018.
|
|
September 30, 2019
|
|
December 31, 2018
|
|
|
|
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 ASC 260, “Earnings
Per Share.”
On an equivalent Class A common stock basis,
there were 620,592 shares outstanding as of September 30, 2019 and December 31, 2018. There are no dilutive securities outstanding.
For financial reporting purposes, the proportional
ownership of the Company’s common stock owned by the investment partnerships is excluded in the earnings per share calculation.
After giving effect for the investment partnerships’ proportional ownership of common stock, the equivalent Class A weighted
average number of common shares during the third quarters of 2019 and 2018 were 343,519 and 346,912, respectively. The equivalent
Class A weighted average number of common shares during the first nine months of 2019 and 2018 were 345,249 and 348,678, respectively.
Each Class A common share is entitled to one
vote. Class B common stock possesses economic rights equal to one-fifth (1/5th) of such rights of Class A common stock;
however, Class B common stock has no voting rights.
Note 4. Investments
Available for sale investments were $39,303
and $33,860 as of September 30, 2019 and December 31, 2018, respectively. Investments in equity securities and a related derivative
position of $4,463 are included in investments as of September 30, 2019 and in other current assets as of December 31, 2018. The
investments are 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.
Note 5. Investment Partnerships (continued)
Biglari Capital Corp. is the general partner
of the investment partnerships and is an entity solely owned by Mr. Biglari.
The fair value and adjustment for Company common
stock held by the investment partnerships to determine the carrying value of our partnership interest is presented below.
|
|
Fair Value
|
|
Company Common Stock
|
|
Carrying Value
|
Partnership interest at December 31, 2018
|
|
$
|
715,102
|
|
|
$
|
157,622
|
|
|
$
|
557,480
|
|
Investment partnership gains (losses)
|
|
|
63,419
|
|
|
|
(6,382
|
)
|
|
|
69,801
|
|
Contributions (net of distributions) to investment partnerhips
|
|
|
(64,329
|
)
|
|
|
|
|
|
|
(64,329
|
)
|
Increase in proportionate share of Company stock held
|
|
|
|
|
|
|
1,473
|
|
|
|
(1,473
|
)
|
Partnership interest at September 30, 2019
|
|
$
|
714,192
|
|
|
$
|
152,713
|
|
|
$
|
561,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value
|
|
|
|
Company Common Stock
|
|
|
|
Carrying Value
|
|
Partnership interest at December 31, 2017
|
|
$
|
925,279
|
|
|
$
|
359,258
|
|
|
$
|
566,021
|
|
Investment partnership gains (losses)
|
|
|
(152,261
|
)
|
|
|
(128,407
|
)
|
|
|
(23,854
|
)
|
Contributions (net of distributions) to investment partnerships
|
|
|
(26,360
|
)
|
|
|
|
|
|
|
(26,360
|
)
|
Increase in proportionate share of Company stock held
|
|
|
|
|
|
|
19,152
|
|
|
|
(19,152
|
)
|
Partnership interest at September 30, 2018
|
|
$
|
746,658
|
|
|
$
|
250,003
|
|
|
$
|
496,655
|
|
The
carrying value of the investment partnerships net of deferred taxes is presented below.
|
|
September 30,
2019
|
|
December 31, 2018
|
Carrying value of investment partnerships
|
|
$
|
561,479
|
|
|
$
|
557,480
|
|
Deferred tax liability related to investment partnerships
|
|
|
(58,193
|
)
|
|
|
(92,703
|
)
|
Carrying value of investment partnerships net of deferred taxes
|
|
$
|
503,286
|
|
|
$
|
464,777
|
|
The Company’s proportionate share of
Company stock held by investment partnerships at cost is $375,704 and $374,231 at September 30, 2019 and December 31, 2018, 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
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Gains (losses) on investment partnership
|
|
$
|
1,449
|
|
|
$
|
(19,008
|
)
|
|
$
|
69,801
|
|
|
$
|
(23,854
|
)
|
Tax expense (benefit)
|
|
|
49
|
|
|
|
(6,119
|
)
|
|
|
15,910
|
|
|
|
(8,163
|
)
|
Net earnings (loss)
|
|
$
|
1,400
|
|
|
$
|
(12,889
|
)
|
|
$
|
53,891
|
|
|
$
|
(15,691
|
)
|
On December 31 of each year, the general partner
of the investment partnerships 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 2019 or 2018. Our investments in these partnerships
are committed on a rolling 5-year basis.
Note 5. 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 September 30, 2019
|
|
$
|
109,895
|
|
|
$
|
803,338
|
|
Total liabilities as of September 30, 2019
|
|
$
|
112
|
|
|
$
|
116,280
|
|
Revenue for the first nine months of 2019
|
|
$
|
3,332
|
|
|
$
|
71,578
|
|
Earnings for the first nine months of 2019
|
|
$
|
3,278
|
|
|
$
|
65,637
|
|
Biglari Holdings’ ownership interest as of September 30, 2019
|
|
|
66.1
|
%
|
|
|
93.5
|
%
|
|
|
|
|
|
|
|
|
|
Total assets as of December 31, 2018
|
|
$
|
107,207
|
|
|
$
|
901,750
|
|
Total liabilities as of December 31, 2018
|
|
$
|
447
|
|
|
$
|
202,770
|
|
Revenue for the first nine months of 2018
|
|
$
|
(49,895
|
)
|
|
$
|
(122,622
|
)
|
Earnings (loss) for the first nine months of 2018
|
|
$
|
(49,944
|
)
|
|
$
|
(129,691
|
)
|
Biglari Holdings’ ownership interest as of September 30, 2018
|
|
|
65.8
|
%
|
|
|
92.2
|
%
|
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.
Transactions with The Lion Fund II, L.P. were as follows.
|
|
Third Quarter
|
|
First Nine Months
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
Contributions
|
|
$
|
—
|
|
|
$
|
7,340
|
|
|
$
|
40,000
|
|
|
$
|
7,340
|
|
Distributions
|
|
|
(61,839
|
)
|
|
|
(26,000
|
)
|
|
|
(104,329
|
)
|
|
|
(33,700
|
)
|
|
|
$
|
(61,839
|
)
|
|
$
|
(18,660
|
)
|
|
$
|
(64,329
|
)
|
|
$
|
(26,360
|
)
|
Note 6. Property and Equipment
Property and equipment is composed of the following.
|
|
September 30,
2019
|
|
December 31, 2018
|
Land
|
|
$
|
151,670
|
|
|
$
|
146,015
|
|
Buildings
|
|
|
146,985
|
|
|
|
142,658
|
|
Land and leasehold improvements
|
|
|
160,292
|
|
|
|
158,938
|
|
Equipment
|
|
|
268,304
|
|
|
|
201,738
|
|
Construction in progress
|
|
|
3,144
|
|
|
|
1,703
|
|
|
|
|
730,395
|
|
|
|
651,052
|
|
Less accumulated depreciation, depletion and amortization
|
|
|
(374,906
|
)
|
|
|
(376,336
|
)
|
Property and equipment, net
|
|
$
|
355,489
|
|
|
$
|
274,716
|
|
The Company recorded an impairment to long-lived
assets of $5,079 and $7,417 in the third quarter and first nine months of 2019, respectively, and $345 and $670 in the third quarter
and first nine months of 2018, respectively. The impairments are primarily attributable to closed stores. As of September 30, 2019,
a total of 106 Steak n Shake restaurants have been temporarily closed. The Company is actively working to identify franchise
partners for these stores. Although the Company is committed to the franchise partnership model, future impairments are possible.
The fair value of the long-lived assets was determined based on Level 2 inputs using a discounted cash flow model and quoted prices
for the properties.
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, 2018
|
|
$
|
28,139
|
|
|
$
|
11,913
|
|
|
$
|
40,052
|
|
Change in foreign exchange rates during the first nine months of 2019
|
|
|
(28
|
)
|
|
|
—
|
|
|
|
(28
|
)
|
Goodwill at September 30, 2019
|
|
$
|
28,111
|
|
|
$
|
11,913
|
|
|
$
|
40,024
|
|
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.
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 2019
or 2018.
Other Intangible Assets
Other intangible assets are composed of the
following.
|
|
September 30, 2019
|
|
December 31, 2018
|
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Total
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Total
|
Franchise agreement
|
|
$
|
5,310
|
|
|
$
|
(5,045
|
)
|
|
$
|
265
|
|
|
$
|
5,310
|
|
|
$
|
(4,647
|
)
|
|
$
|
663
|
|
Other
|
|
|
810
|
|
|
|
(788
|
)
|
|
|
22
|
|
|
|
810
|
|
|
|
(774
|
)
|
|
|
36
|
|
Total
|
|
|
6,120
|
|
|
|
(5,833
|
)
|
|
|
287
|
|
|
|
6,120
|
|
|
|
(5,421
|
)
|
|
|
699
|
|
Intangible assets with indefinite lives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade names
|
|
|
15,876
|
|
|
|
—
|
|
|
|
15,876
|
|
|
|
15,876
|
|
|
|
—
|
|
|
|
15,876
|
|
Other assets with indefinite lives
|
|
|
11,040
|
|
|
|
—
|
|
|
|
11,040
|
|
|
|
11,539
|
|
|
|
—
|
|
|
|
11,539
|
|
Total intangible assets
|
|
$
|
33,036
|
|
|
$
|
(5,833
|
)
|
|
$
|
27,203
|
|
|
$
|
33,535
|
|
|
$
|
(5,421
|
)
|
|
$
|
28,114
|
|
Intangible assets subject to amortization consist
of franchise agreements connected with the purchase of Western Sizzlin 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 the first nine months of 2019 and 2018 was $412 and $422, respectively. The Company’s intangible
assets with definite lives will fully amortize in 2020. Intangible assets with indefinite lives consist of trade names, franchise
rights as well as lease rights.
Note 8. Restaurant Operations Revenues
Restaurant operations revenues were as follows.
|
|
Third Quarter
|
|
First Nine Months
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net sales
|
|
$
|
136,651
|
|
|
$
|
186,368
|
|
|
$
|
454,344
|
|
|
$
|
563,736
|
|
Franchise royalties and fees
|
|
|
7,627
|
|
|
|
7,762
|
|
|
|
21,685
|
|
|
|
22,637
|
|
Other
|
|
|
833
|
|
|
|
911
|
|
|
|
2,918
|
|
|
|
3,196
|
|
|
|
$
|
145,111
|
|
|
$
|
195,041
|
|
|
$
|
478,947
|
|
|
$
|
589,569
|
|
Net sales
Net sales are composed of retail sales of
food through Company-owned stores. Company-owned store revenues are recognized when control of the food items are transferred to
our customers 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 royalties and fees
Franchise royalties and fees are composed of
royalties and fees from Steak n Shake and Western Sizzlin franchisees. Royalty revenues are based on a percentage of franchise
sales and are recognized when the retail food items are purchased by franchise customers. Initial franchise fees received are deferred
when amounts are received and recognized as revenue on a straight-line basis over the term of each respective franchise agreement,
which is typically 20 years.
Our advertising arrangements with franchisees
are reported in franchise royalties and fees.
Gift card revenue
Restaurant operations sells 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 estimates 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 9. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses include
the following.
|
|
September 30,
2019
|
|
December 31, 2018
|
Accounts payable
|
|
$
|
25,108
|
|
|
$
|
41,967
|
|
Gift card liability
|
|
|
18,472
|
|
|
|
22,685
|
|
Salaries, wages, and vacation
|
|
|
7,056
|
|
|
|
13,107
|
|
Taxes payable
|
|
|
54,447
|
|
|
|
11,214
|
|
Insurance accruals
|
|
|
13,443
|
|
|
|
12,127
|
|
Deferred revenue
|
|
|
12,446
|
|
|
|
11,681
|
|
Other
|
|
|
7,850
|
|
|
|
4,484
|
|
Accounts payable and accrued expenses
|
|
$
|
138,822
|
|
|
$
|
117,265
|
|
Note 10. Notes Payable and Other Borrowings
Notes payable and other borrowings include the following.
Current portion of notes payable and other borrowings
|
|
September 30,
2019
|
|
December 31, 2018
|
Notes payable
|
|
$
|
2,200
|
|
|
$
|
2,200
|
|
Unamortized original issue discount and debt issuance costs
|
|
|
(972
|
)
|
|
|
(943
|
)
|
Finance obligations
|
|
|
4,137
|
|
|
|
4,463
|
|
Finance lease liabilities
|
|
|
1,640
|
|
|
|
—
|
|
Total current portion of notes payable and other borrowings
|
|
$
|
7,005
|
|
|
$
|
5,720
|
|
|
|
|
|
|
|
|
|
|
Long-term notes payable and other borrowings
|
|
|
|
|
|
|
|
|
Notes payable
|
|
$
|
179,848
|
|
|
$
|
181,498
|
|
Unamortized original issue discount and debt issuance costs
|
|
|
(501
|
)
|
|
|
(1,234
|
)
|
Finance obligations
|
|
|
75,467
|
|
|
|
59,737
|
|
Finance leases liabilities
|
|
|
10,043
|
|
|
|
—
|
|
Total long-term notes payable and other borrowings
|
|
$
|
264,857
|
|
|
$
|
240,001
|
|
Steak n Shake Credit Facility
On March 19, 2014, Steak n Shake and its subsidiaries
entered into a credit agreement which provided for a senior secured term loan facility in an aggregate principal amount of $220,000.
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.
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.
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%. The interest rate on the term
loan was 5.80% as of September 30, 2019.
The credit agreement includes customary affirmative
and negative covenants and events of default. Steak n Shake’s credit facility contains restrictions on its ability to pay
dividends to Biglari Holdings.
The term loan is secured by first priority
security interests in substantially all the assets of Steak n Shake. Disruptions in debt capital markets that restrict access to
funding when needed could adversely affect the results of operations, liquidity and capital resources of Steak n Shake. Biglari
Holdings is not a guarantor under the credit facility. As of September 30, 2019, $182,048 was outstanding under the term loan.
Note 11. Leases
The Company adopted ASC 842 on January 1, 2019,
as discussed in Note 2. Under ASC 842, leases are generally classified as either operating right-of-use assets or finance
lease assets. Right-of-use assets represent the Company's right to use an underlying asset during the lease term. Right-of-use
liabilities represent the Company's obligation to make lease payments arising from the lease. These assets and liabilities are calculated
by using the net present value of fixed lease payments over the lease term. The Company's lease terms include options
to extend or terminate the lease when it is reasonably certain that the option will be exercised. The Company applied
an incremental borrowing rate to determine the present value of lease payments. Finance lease agreements include an interest rate
that is used to determine the present value of future lease payments.
A significant portion of our operating and
finance lease portfolio includes restaurant locations. The Company’s operating leases with a term of 12 months or greater
were recognized as operating right-of-use assets and liabilities and recorded as operating lease assets and operating lease liabilities.
Historical capital leases and certain historical build-to-suit leases were reclassified from obligations under leases to finance
lease assets and liabilities. Finance lease assets are recorded in property and equipment and finance lease liabilities are recorded
in notes payable and other borrowings. Historical sale-and-leaseback transactions in which the Company is deemed to have a continued
interest in the leased asset are recorded as property and equipment and as finance obligations. Finance obligations are recorded
in notes payable and other borrowings.
Note 11. Leases (continued)
Operating lease expense and finance lease depreciation
expense are recognized on a straight-line basis over the lease term.
Total lease cost consists of the following.
|
|
Third Quarter
2019
|
|
First Nine Months
2019
|
Finance lease costs:
|
|
|
|
|
|
|
|
|
Amortization of right-of-use assets
|
|
$
|
487
|
|
|
$
|
1,466
|
|
Interest on lease liabilities
|
|
|
208
|
|
|
|
630
|
|
Operating lease costs *
|
|
|
4,445
|
|
|
|
12,305
|
|
Total lease costs
|
|
$
|
5,140
|
|
|
$
|
14,401
|
|
*Includes
short-term leases, variable lease costs and sublease income, which are immaterial.
Supplemental cash flow information related to leases is as follows.
|
|
First Nine Months 2019
|
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
|
Financing cash flows from finance leases
|
|
$
|
1,201
|
|
Operating cash flows from finance leases
|
|
$
|
630
|
|
Operating cash flows from operating leases
|
|
$
|
12,558
|
|
Right-of-use assets obtained in exchange for lease obligations:
|
|
|
|
|
Finance lease liabilities
|
|
$
|
1,097
|
|
Operating lease liabilities
|
|
$
|
11,069
|
|
Supplemental balance sheet information related to leases is as follows.
|
|
September 30,
2019
|
Finance leases:
|
|
|
|
|
Property and equipment, net
|
|
$
|
11,267
|
|
|
|
|
|
|
Current portion of notes payable and other borrowings
|
|
$
|
1,640
|
|
Long-term notes payable and other borrowings
|
|
|
10,043
|
|
Total finance lease liabilities
|
|
$
|
11,683
|
|
Weighted-average lease terms and discount rates are as follows.
|
|
September 30,
2019
|
Weighted-average remaining lease terms:
|
|
|
|
|
Finance leases
|
|
|
8.5 years
|
|
Operating leases
|
|
|
7.3 years
|
|
|
|
|
|
|
Weighted-average discount rates:
|
|
|
|
|
Finance leases
|
|
|
7.1%
|
|
Operating leases
|
|
|
6.9%
|
|
Note 11. Leases (continued)
Maturities of lease liabilities as of September 30, 2019 are as
follows.
Year
|
|
Operating Leases
|
|
Finance
Leases
|
2019
|
|
$
|
4,637
|
|
|
$
|
609
|
|
2020
|
|
|
15,774
|
|
|
|
2,377
|
|
2021
|
|
|
14,683
|
|
|
|
2,358
|
|
2022
|
|
|
12,630
|
|
|
|
1,869
|
|
2023
|
|
|
10,580
|
|
|
|
1,669
|
|
After 2023
|
|
|
32,428
|
|
|
|
6,803
|
|
Total lease payments
|
|
|
90,732
|
|
|
|
15,685
|
|
Less interest
|
|
|
19,315
|
|
|
|
4,002
|
|
Total lease liabilities
|
|
$
|
71,417
|
|
|
$
|
11,683
|
|
On December 31, 2018, obligations under non-cancelable
finance obligations, capital leases, and operating leases (excluding real estate taxes, insurance and maintenance costs) require
the following minimum future rental payments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Leases
|
|
Year
|
|
|
Finance Obligations
|
|
|
|
Capital
Leases
|
|
|
|
Total
|
|
|
|
Operating Property
|
|
|
|
Non-Operating Property
|
|
2019
|
|
$
|
11,114
|
|
|
$
|
55
|
|
|
$
|
11,169
|
|
|
$
|
17,914
|
|
|
$
|
483
|
|
2020
|
|
|
8,040
|
|
|
|
55
|
|
|
|
8,095
|
|
|
|
16,691
|
|
|
|
554
|
|
2021
|
|
|
5,925
|
|
|
|
55
|
|
|
|
5,980
|
|
|
|
16,787
|
|
|
|
578
|
|
2022
|
|
|
2,951
|
|
|
|
5
|
|
|
|
2,956
|
|
|
|
15,603
|
|
|
|
599
|
|
2023
|
|
|
1,587
|
|
|
|
—
|
|
|
|
1,587
|
|
|
|
14,071
|
|
|
|
539
|
|
After 2023
|
|
|
1,673
|
|
|
|
—
|
|
|
|
1,673
|
|
|
|
36,709
|
|
|
|
1,790
|
|
Total minimum future rental payments
|
|
|
31,290
|
|
|
|
170
|
|
|
|
31,460
|
|
|
$
|
117,775
|
|
|
$
|
4,543
|
|
Less amount representing interest
|
|
|
18,004
|
|
|
|
60
|
|
|
|
18,064
|
|
|
|
|
|
|
|
|
|
Total principal obligations under leases
|
|
|
13,286
|
|
|
|
110
|
|
|
|
13,396
|
|
|
|
|
|
|
|
|
|
Less current portion
|
|
|
4,433
|
|
|
|
30
|
|
|
|
4,463
|
|
|
|
|
|
|
|
|
|
Non-current principal obligations under leases
|
|
|
8,853
|
|
|
|
80
|
|
|
|
8,933
|
|
|
|
|
|
|
|
|
|
Residual value at end of lease term
|
|
|
50,744
|
|
|
|
60
|
|
|
|
50,804
|
|
|
|
|
|
|
|
|
|
Obligations under leases
|
|
$
|
59,597
|
|
|
$
|
140
|
|
|
$
|
59,737
|
|
|
|
|
|
|
|
|
|
Note 12. Accumulated Other Comprehensive
Income
During the first nine months of 2019 and 2018,
the changes in the balances of each component of accumulated other comprehensive income (loss), net of tax, were as follows.
|
|
Nine months ended September 30, 2019
|
|
Nine months ended September 30, 2018
|
|
|
|
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
|
|
$
|
(2,516
|
)
|
|
$
|
—
|
|
|
$
|
(2,516
|
)
|
|
$
|
(1,462
|
)
|
|
$
|
58
|
|
|
$
|
(1,404
|
)
|
Reclassification to (earnings) loss
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
(58
|
)
|
|
|
(58
|
)
|
Foreign currency translation
|
|
|
(736
|
)
|
|
|
|
|
|
|
(736
|
)
|
|
|
(783
|
)
|
|
|
|
|
|
|
(783
|
)
|
Ending Balance
|
|
$
|
(3,252
|
)
|
|
$
|
—
|
|
|
$
|
(3,252
|
)
|
|
$
|
(2,245
|
)
|
|
$
|
—
|
|
|
$
|
(2,245
|
)
|
During the third quarter of 2019 and 2018,
the changes in the balances of each component of accumulated other comprehensive income (loss), net of tax, were as follows.
|
|
Third Quarter 2019
|
|
Third Quarter 2018
|
|
|
|
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
|
|
$
|
(2,624
|
)
|
|
$
|
—
|
|
|
$
|
(2,624
|
)
|
|
$
|
(2,107
|
)
|
|
$
|
—
|
|
|
$
|
(2,107
|
)
|
Reclassification to (earnings) loss
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
Foreign currency translation
|
|
|
(628
|
)
|
|
|
|
|
|
|
(628
|
)
|
|
|
(138
|
)
|
|
|
|
|
|
|
(138
|
)
|
Ending Balance
|
|
$
|
(3,252
|
)
|
|
$
|
—
|
|
|
$
|
(3,252
|
)
|
|
$
|
(2,245
|
)
|
|
$
|
—
|
|
|
$
|
(2,245
|
)
|
There were no reclassifications from accumulated
other comprehensive income to earnings during the third quarters of 2019 and 2018 and first nine months of 2019. Reclassifications
made from accumulated other comprehensive income to earnings during the first nine months of 2018 were $58.
Note 13. Income Taxes
In determining the quarterly provision for
income taxes, the Company used a discrete effective tax rate method based on statutory tax rates for 2019 and an estimated annual
effective tax rate for 2018. 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 third quarter of
2019 was $614 compared to $11,199 for the third quarter of 2018. Income tax expense for the first nine months of 2019 was
$7,026 compared to an income tax benefit of $12,886 for the first nine months of 2018. The variance in income taxes between
2019 and 2018 is attributable to taxes on income generated by the investment partnerships.
As of September 30, 2019 and December 31, 2018,
we had approximately $356 and $341, respectively, of unrecognized tax benefits, which are included in other liabilities in the
consolidated balance sheets.
Note 14. 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.
On January 29, 2018, a shareholder of the Company
filed a purported class action complaint against the Company and the members of our Board of Directors in the Superior Court of
Hamilton County, Indiana. The shareholder generally alleges claims of breach of fiduciary duty by the members of our Board of Directors
and unjust enrichment to Mr. Biglari as a result of the dual class structure.
Note 14. Commitments and Contingencies (continued)
On March 26, 2018, a shareholder of the
Company filed a purported class action complaint against the Company and the members of our Board of Directors in the Superior
Court of Hamilton County, Indiana. This shareholder generally alleges claims of breach of fiduciary duty by the members of our
Board of Directors. This shareholder sought to enjoin the shareholder vote on April 26, 2018 to approve the dual class structure.
On April 16, 2018, the shareholders withdrew their motions to enjoin the shareholder vote on April 26, 2018.
On May 17, 2018, the shareholders who filed
the January 29, 2018 complaint and the March 26, 2018 complaint filed a new, consolidated complaint against the Company and the
members of our Board of Directors in the Superior Court of Hamilton County, Indiana. The shareholders generally allege claims of
breach of fiduciary duty by the members of our Board of Directors and unjust enrichment to Mr. Biglari arising out of the dual
class structure. The shareholders seek, for themselves and on behalf of all other shareholders as a class, a declaration that the
defendants breached their duty to the shareholders and the class, and to recover unspecified damages, pre-judgment and post-judgment
interest, and an award of their attorneys’ fees and other costs.
On December 14, 2018, the judge of the Superior
Court of Hamilton County, Indiana issued an order granting the Company’s motion to dismiss the shareholders’ lawsuits.
On January 11, 2019, the shareholders filed an appeal of the judge’s order dismissing the lawsuits. The appeal was
argued on October 7, 2019, and we await a decision.
On September 8, 2014, two former restaurant
manager employees filed a purported class action lawsuit against Steak n Shake (Drake v. Steak n Shake). On January 30, 2017,
a former restaurant manager employee filed a purported class action lawsuit against Steak n Shake (Clendenen v. Steak n Shake).
The plaintiffs generally allege claims that Steak n Shake improperly classified its managerial employees as exempt. On February
28, 2019, a jury returned a verdict in the Drake case against Steak n Shake. The Company agreed to settle both cases for $8,350
and the Court approved the terms of the settlement on July 26, 2019. The settlement is reflected in selling, general and administrative
expenses in the consolidated statement of earnings.
Note 15. 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 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.
Note 15. Fair Value of Financial Assets
(continued)
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 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 1 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 publicly traded
securities, each of which 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 Levels 1 and 2 of the fair value hierarchy
depending on the instrument.
As of September 30, 2019 and December 31, 2018,
the fair values of financial assets were as follows.
|
|
September 30, 2019
|
|
December 31, 2018
|
|
|
|
|
|
|
|
|
Level 1
|
|
|
|
Level 2
|
|
|
|
Level 3
|
|
|
|
Total
|
|
|
|
Level 1
|
|
|
|
Level 2
|
|
|
|
Level 3
|
|
|
|
Total
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash equivalents
|
|
$
|
126
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
126
|
|
|
$
|
21,448
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,448
|
|
Equity securities: Consumer goods
|
|
|
—
|
|
|
|
6,413
|
|
|
|
—
|
|
|
|
6,413
|
|
|
|
1,708
|
|
|
|
4,100
|
|
|
|
—
|
|
|
|
5,808
|
|
Bonds
|
|
|
37,631
|
|
|
|
—
|
|
|
|
—
|
|
|
|
37,631
|
|
|
|
32,404
|
|
|
|
—
|
|
|
|
—
|
|
|
|
32,404
|
|
Derivatives
|
|
|
202
|
|
|
|
2,150
|
|
|
|
—
|
|
|
|
2,352
|
|
|
|
—
|
|
|
|
2,755
|
|
|
|
—
|
|
|
|
2,755
|
|
Non-qualified deferred compensation plan investments
|
|
|
2,022
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,022
|
|
|
|
2,149
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,149
|
|
Total assets at fair value
|
|
$
|
39,981
|
|
|
$
|
8,563
|
|
|
$
|
—
|
|
|
$
|
48,544
|
|
|
$
|
57,709
|
|
|
$
|
6,855
|
|
|
$
|
—
|
|
|
$
|
64,564
|
|
There were no changes in our valuation techniques
used to measure fair values on a recurring basis.
Note 16. Related Party Transactions
Services Agreement
During 2017, the Company entered into a services
agreement with Biglari Enterprises LLC and Biglari Capital Corp. (collectively, the “Biglari Entities”) under which
the Biglari Entities provide business and administrative related services to the Company. The Biglari Entities are owned by Mr.
Biglari. 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 monthly fee will remain at $700 during 2019. The Company paid Biglari Enterprises
$6,300 in service fees during the first nine months of 2019 and 2018. The services agreement does not alter the hurdle rate connected
with the incentive reallocation paid to Biglari Capital Corp. by the Company.
License Agreement
During 2013,
the Company entered into a Trademark License Agreement (the “License Agreement”) with Mr. Biglari. The Company and
its subsidiaries paid no royalties to Mr. Biglari under the License Agreement during its term. The License Agreement was terminated
on March 26, 2019.
Incentive Agreement Amendment
The Incentive Agreement was amended on March
26, 2019 to remove the annual limitation on Mr. Biglari’s incentive compensation, as well as the requirement of Mr. Biglari
to use 30% of his incentive payments to purchase shares of the Company. In connection with the amendment, the change of control
and severance provisions contained in the Incentive Agreement were eliminated and the License Agreement was terminated. The amendment
is effective in 2019.
Note 17. 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. The Company also reports segment information for First Guard, Maxim and Southern Oil. 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 for the third quarters and first nine
months of 2019 and 2018 were as follows.
|
|
Revenue
|
|
|
Third Quarter
|
|
First Nine Months
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Operating Businesses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steak n Shake
|
|
$
|
141,354
|
|
|
$
|
191,240
|
|
|
$
|
467,471
|
|
|
$
|
578,111
|
|
Western Sizzlin
|
|
|
3,757
|
|
|
|
3,801
|
|
|
|
11,476
|
|
|
|
11,458
|
|
Total Restaurant Operations
|
|
|
145,111
|
|
|
|
195,041
|
|
|
|
478,947
|
|
|
|
589,569
|
|
First Guard
|
|
|
7,681
|
|
|
|
7,038
|
|
|
|
22,305
|
|
|
|
20,330
|
|
Southern Oil
|
|
|
6,500
|
|
|
|
—
|
|
|
|
6,500
|
|
|
|
—
|
|
Maxim
|
|
|
924
|
|
|
|
1,503
|
|
|
|
2,666
|
|
|
|
4,647
|
|
|
|
$
|
160,216
|
|
|
$
|
203,582
|
|
|
$
|
510,418
|
|
|
$
|
614,546
|
|
Earnings (losses) before income taxes for the
third quarters and first nine months of 2019 and 2018 were as follows.
|
|
Earnings (Losses) Before Income Taxes
|
|
|
Third Quarter
|
|
First Nine Months
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Operating Businesses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steak n Shake
|
|
$
|
(861
|
)
|
|
$
|
(3,172
|
)
|
|
$
|
(22,776
|
)
|
|
$
|
(1,505
|
)
|
Western Sizzlin
|
|
|
544
|
|
|
|
516
|
|
|
|
1,433
|
|
|
|
1,564
|
|
Total Restaurant Operations
|
|
|
(317
|
)
|
|
|
(2,656
|
)
|
|
|
(21,343
|
)
|
|
|
59
|
|
First Guard
|
|
|
2,279
|
|
|
|
1,813
|
|
|
|
5,673
|
|
|
|
4,624
|
|
Southern Oil
|
|
|
1,448
|
|
|
|
—
|
|
|
|
1,448
|
|
|
|
—
|
|
Maxim
|
|
|
364
|
|
|
|
111
|
|
|
|
428
|
|
|
|
(90
|
)
|
Other
|
|
|
109
|
|
|
|
171
|
|
|
|
362
|
|
|
|
474
|
|
Total Operating Businesses
|
|
|
3,883
|
|
|
|
(561
|
)
|
|
|
(13,432
|
)
|
|
|
5,067
|
|
Corporate and Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
(2,873
|
)
|
|
|
(2,366
|
)
|
|
|
(8,270
|
)
|
|
|
(8,536
|
)
|
Investment partnership gains (losses)
|
|
|
1,449
|
|
|
|
(19,008
|
)
|
|
|
69,801
|
|
|
|
(23,854
|
)
|
Total Corporate and Investments
|
|
|
(1,424
|
)
|
|
|
(21,374
|
)
|
|
|
61,531
|
|
|
|
(32,390
|
)
|
Interest expense on notes payable and other borrowings
|
|
|
(3,090
|
)
|
|
|
(2,967
|
)
|
|
|
(9,298
|
)
|
|
|
(8,619
|
)
|
|
|
$
|
(631
|
)
|
|
$
|
(24,902
|
)
|
|
$
|
38,801
|
|
|
$
|
(35,942
|
)
|