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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
Commission file number 001-38477
BIGLARI HOLDINGS INC.
(Exact name of registrant as specified in its charter)

Indiana82-3784946
(State or other jurisdiction of incorporation)(I.R.S. Employer Identification No.)

19100 Ridgewood Parkway
Suite 1200
San Antonio,Texas78259
(Address of principal executive offices)(Zip Code)
(210) 344-3400
Registrant’s telephone number, including area code
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolsName of each exchange on which registered
Class A Common Stock, no par value BH.ANew York Stock Exchange
Class B Common Stock, no par valueBHNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x    No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x    No ¨


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and an “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
  Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No x
Number of shares of common stock outstanding as of May 8, 2024:
Class A common stock –  206,864 
Class B common stock –2,068,640 


BIGLARI HOLDINGS INC.
INDEX
Page No.



PART 1 – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BIGLARI HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
March 31,
2024
December 31,
2023
(Unaudited)
Assets
Current assets:
Cash and cash equivalents$34,536 $28,066 
Investments97,725 91,879 
Receivables24,198 22,241 
Inventories3,565 2,980 
Other current assets8,410 7,385 
Total current assets168,434 152,551 
Property and equipment377,363 380,491 
Operating lease assets34,073 32,215 
Goodwill and other intangible assets76,642 76,760 
Investment partnerships220,757 199,103 
Other assets8,048 8,302 
Total assets$885,317 $849,422 
Liabilities and shareholders’ equity
Liabilities
Current liabilities:
Accounts payable and accrued expenses$72,811 $66,743 
Loss and loss adjustment expenses16,013 15,168 
Unearned premiums14,939 14,334 
Current portion of lease obligations14,519 14,855 
Total current liabilities118,282 111,100 
Lease obligations91,912 86,389 
Deferred taxes41,801 37,939 
Asset retirement obligations14,402 14,316 
Other liabilities348 348 
Total liabilities266,745 250,092 
Shareholders’ equity
Common stock1,138 1,138 
Additional paid-in capital385,594 385,594 
Retained earnings654,037 631,458 
Accumulated other comprehensive loss(2,549)(2,518)
Treasury stock, at cost(419,648)(416,342)
Biglari Holdings Inc. shareholders’ equity618,572 599,330 
Total liabilities and shareholders’ equity$885,317 $849,422 
See accompanying Notes to Consolidated Financial Statements.
1

BIGLARI HOLDINGS INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(dollars in thousands except per share amounts)
First Quarter
20242023
(Unaudited)
Revenues  
Restaurant operations$61,996 $61,129 
Insurance premiums and other17,733 16,229 
Oil and gas9,510 12,223 
Licensing and media212 595 
Total revenues89,451 90,176 
Costs and expenses
Restaurant cost of sales34,421 32,738 
Insurance losses and underwriting expenses15,063 13,013 
Oil and gas production costs4,499 5,471 
Licensing and media costs503 452 
Selling, general and administrative18,275 17,263 
Gain on sale of oil and gas properties(481) 
Impairments107 776 
Depreciation, depletion, and amortization10,053 9,940 
Interest expense on leases1,314 1,307 
Interest expense on debt 167 
Total costs and expenses83,754 81,127 
Other income
Investment gains1,713 3,638 
Investment partnership gains21,985 72,588 
Total other income 23,698 76,226 
Earnings before income taxes29,395 85,275 
Income tax expense6,816 19,738 
Net earnings22,579 65,537 
Earnings attributable to noncontrolling interest 651 
Net earnings attributable to Biglari Holdings Inc. shareholders$22,579 $64,886 
Net earnings per average equivalent Class A share* $79.56 $222.28 
*Net earnings per average equivalent Class B share outstanding are one-fifth of the average equivalent Class A share or $15.91 for the first quarter of 2024 and $44.46 for the first quarter of 2023.
See accompanying Notes to Consolidated Financial Statements.

2

BIGLARI HOLDINGS INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(dollars in thousands)
 First Quarter
 20242023
 (Unaudited)
Net earnings$22,579 $65,537 
Foreign currency translation(31)332 
Comprehensive income22,548 65,869 
Comprehensive income attributable to noncontrolling interest 651 
Total comprehensive income attributable to Biglari Holdings Inc. shareholders$22,548 $65,218 

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(dollars in thousands)
(Unaudited)

Biglari Holdings Inc. Shareholders’ Equity
Common
Stock
Additional Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive 
Income (Loss)
Treasury
Stock
Non-controlling InterestsTotal
For the first quarter of 2024
Balance at December 31, 2023$1,138 $385,594 $631,458 $(2,518)$(416,342)$ $599,330 
Net earnings22,579 22,579 
Other comprehensive income (loss)(31)(31)
Adjustment for holdings in investment partnerships(3,306)(3,306)
Balance at March 31, 2024$1,138 $385,594 $654,037 $(2,549)$(419,648)$ $618,572 

For the first quarter of 2023
Balance at December 31, 2022$1,138 $381,788 $576,510 $(2,790)$(409,680)$8,602 $555,568 
Net earnings64,886 651 65,537 
Other comprehensive income (loss)332 332 
Adjustment for holdings in investment partnerships(239)(239)
Balance at March 31, 2023$1,138 $381,788 $641,396 $(2,458)$(409,919)$9,253 $621,198 
See accompanying Notes to Consolidated Financial Statements.
3

BIGLARI HOLDINGS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
First Quarter
20242023
(Unaudited)
Operating activities  
Net earnings$22,579 $65,537 
Adjustments to reconcile net earnings to operating cash flows:
Depreciation and amortization10,053 9,940 
Provision for deferred income taxes3,877 18,450 
Asset impairments107 776 
Gains on sale of assets(1,431)(1,590)
Investment and investment partnerships gains(23,698)(76,226)
Distributions from investment partnerships1,000  
Changes in receivables and inventories(2,249)2,006 
Changes in accounts payable and accrued expenses8,887 1,030 
Net cash provided by operating activities19,125 19,923 
Investing activities
Capital expenditures(4,596)(5,929)
Proceeds from property and equipment disposals920 2,140 
Purchases of interests in limited partnerships(3,975)(2,700)
Purchases of investments(20,856)(27,255)
Sales of investments and redemptions of fixed maturity securities17,265 21,009 
Net cash used in investing activities(11,242)(12,735)
Financing activities
Repayments of borrowings (3,500)
Principal payments on direct financing lease obligations(1,403)(1,550)
Net cash used in financing activities(1,403)(5,050)
Effects of foreign currency exchange rate changes(10)8 
Increase in cash, cash equivalents and restricted cash6,470 2,146 
Cash, cash equivalents and restricted cash at beginning of year29,654 38,805 
Cash, cash equivalents and restricted cash at end of first quarter$36,124 $40,951 
First Quarter
20242023
(Unaudited)
Cash and cash equivalents$34,536 $39,363 
Restricted cash in other long-term assets1,588 1,588 
Cash, cash equivalents and restricted cash at end of first quarter$36,124 $40,951 
See accompanying Notes to Consolidated Financial Statements.
4

BIGLARI HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2024
(dollars in thousands, except share and per share data)
Note 1. Summary of Significant Accounting Policies
Description of Business
The accompanying unaudited consolidated financial statements of Biglari Holdings Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) applicable to interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In our opinion, all adjustments considered necessary to present fairly the results of the interim periods have been included and consist only of normal recurring adjustments. The results for the interim periods shown are not necessarily indicative of results for the year. The financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2023.
Biglari Holdings Inc. is a holding company owning subsidiaries engaged in a number of diverse business activities, including property and casualty insurance, licensing and media, restaurants, and oil and gas. The Company’s largest operating subsidiaries are involved in the franchising and operating of restaurants. Biglari Holdings is founded and led by Sardar Biglari, Chairman and Chief Executive Officer of the Company.

Biglari Holdings’ management system combines decentralized operations with centralized financial decision-making. Operating decisions for the various business units are made by their respective managers. All major investment and capital allocation decisions are made for the Company and its subsidiaries by Mr. Biglari.
As of March 31, 2024, Mr. Biglari beneficially owns shares of the Company that represent approximately 71.5% of the voting interest.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, including Steak n Shake Inc., Western Sizzlin Corporation, First Guard Insurance Company, Maxim Inc., Southern Pioneer Property & Casualty Insurance Company, Southern Oil Company, and Abraxas Petroleum Corporation. Intercompany accounts and transactions have been eliminated in consolidation.
Note 2. Earnings Per Share
Earnings per share of common stock is based on the weighted-average number of shares outstanding during the year. The shares of Company stock attributable to our limited partner interest in The Lion Fund, L.P., and The Lion Fund II, L.P. (collectively, the “investment partnerships”) — based on our proportional ownership during this period — are considered treasury stock on the consolidated balance sheet and thereby deemed not to be included in the calculation of weighted-average common shares outstanding. However, these shares are legally outstanding.
The following table presents shares authorized, issued, and outstanding on March 31, 2024 and December 31, 2023.
 March 31, 2024December 31, 2023
 Class AClass BClass AClass B
Common stock authorized500,000 10,000,000 500,000 10,000,000 
Common stock issued and outstanding206,864 2,068,640 206,864 2,068,640 


5

Note 2. Earnings Per Share (continued)
The Company has applied the “two-class method” of computing earnings per share as prescribed in Accounting Standards Codification (“ASC”) 260, “Earnings Per Share”. (Class B shares are economically equivalent to one-fifth of a Class A share.) The equivalent Class A common stock applied for computing earnings per share excludes the proportional shares of Biglari Holdings’ stock held by the investment partnerships. In the tabulation below is the weighted-average equivalent Class A common stock for earnings per share.
March 31, 2024March 31, 2023
Equivalent Class A common stock outstanding620,592 620,592 
Proportional ownership of Company stock held by investment partnerships336,804 328,681 
Equivalent Class A common stock for earnings per share283,788 291,911 
Note 3. Investments
We classify investments in fixed maturity securities at the acquisition date as available-for-sale. Realized gains and losses on disposals of investments are determined on a specific identification basis. Dividends and interest earned on investments are reported as investment income by our insurance companies. We consider investment income as a component of our aggregate insurance operating results. However, we consider investment gains and losses, whether realized or unrealized, as non-operating.

Investment gains for the first quarter of 2024 and 2023 were $1,713 and $3,638, respectively.
Note 4. Investment Partnerships   
The Company reports on the limited partnership interests in investment partnerships under the equity method of accounting. We record our proportional share of equity in the investment partnerships but exclude Company common stock held by said partnerships. The Company’s pro-rata share of its common stock held by the investment partnerships is recorded as treasury stock even though these shares are legally outstanding. The Company records gains/losses from investment partnerships (inclusive of the investment partnerships’ unrealized gains and losses on their securities) in the consolidated statements of earnings based on our carrying value of these partnerships. The fair value is calculated net of the general partner’s accrued incentive fees. Gains and losses on Company common stock included in the earnings of these partnerships are eliminated because they are recorded as treasury stock. 
Biglari Capital Corp. is the general partner of the investment partnerships. Biglari Capital Corp. is solely owned by Mr. Biglari.
The fair value and adjustment for Company common stock held by the investment partnerships to determine the carrying value of our partnership interest are presented below.
 Fair ValueCompany
Common Stock
Carrying Value
Partnership interest at December 31, 2023$472,772 $273,669 $199,103 
Investment partnership gains (losses)69,162 47,177 21,985 
Contributions (net of distributions)2,975 2,975 
Changes in proportionate share of Company stock held3,306 (3,306)
Partnership interest at March 31, 2024$544,909 $324,152 $220,757 
 Fair ValueCompany
Common Stock
Carrying Value
Partnership interest at December 31, 2022$383,004 $227,210 $155,794 
Investment partnership gains (losses)121,795 49,207 72,588 
Contributions2,700 2,700 
Changes in proportionate share of Company stock held239 (239)
Partnership interest at March 31, 2023$507,499 $276,656 $230,843 
6

Note 4. Investment Partnerships (continued)

The carrying value of the investment partnerships net of deferred taxes is presented below.
 March 31,
2024
December 31, 2023
Carrying value of investment partnerships$220,757 $199,103 
Deferred tax liability related to investment partnerships(31,314)(27,896)
Carrying value of investment partnerships net of deferred taxes$189,443 $171,207 
We expect that a majority of the $31,314 and $27,896 deferred tax liabilities enumerated above will not become due until the dissolution of the investment partnerships.
The Company’s proportionate share of Company stock held by investment partnerships at cost was $419,648 and $416,342 as of March 31, 2024, and December 31, 2023, respectively. 
The carrying value of the partnership interest approximates fair value adjusted by the value of held Company stock. Fair value of our partnership interest is assessed according to our proportional ownership interest of the fair value of investments held by the investment partnerships. Unrealized gains and losses on marketable securities held by the investment partnerships affect our net earnings. 
Gains/losses from investment partnerships recorded in the Company’s consolidated statements of earnings are presented below.
 First Quarter
 20242023
Gains from investment partnerships$21,985 $72,588 
Tax expense4,837 16,559 
Contribution to net earnings$17,148 $56,029 
On December 31 of each year, the general partner of the investment partnerships, Biglari Capital Corp., will earn an incentive reallocation fee for the Company’s investments equal to 25% of the net profits above an annual hurdle rate of 6% over the previous high-water mark. Our policy is to accrue an estimated incentive fee throughout the year. The total incentive reallocation from Biglari Holdings to Biglari Capital Corp. includes gains on the Company’s common stock. Gains and losses on the Company’s common stock and the related incentive reallocations are eliminated in our financial statements.
There were no incentive reallocations accrued during the first quarters of 2024 and 2023.

7

Note 4. Investment Partnerships (continued)

Summarized financial information for The Lion Fund, L.P., and The Lion Fund II, L.P., is presented below.
 Equity in Investment Partnerships
 Lion FundLion Fund II
Total assets as of March 31, 2024$425,899 $412,720 
Total liabilities as of March 31, 2024$31,718 $193,830 
Revenue for the first quarter of 2024$50,262 $31,118 
Earnings for the first quarter of 2024$49,820 $28,237 
Biglari Holdings’ ownership interest as of March 31, 202489.9 %86.3 %
Total assets as of December 31, 2023$371,365 $373,302 
Total liabilities as of December 31, 2023$26,594 $185,024 
Revenue for the first quarter of 2023$63,558 $78,592 
Earnings for the first quarter of 2023$63,404 $76,341 
Biglari Holdings’ ownership interest as of March 31, 202388.6 %86.1 %
Revenue in the financial information of the investment partnerships, summarized above, includes investment income and unrealized gains and losses on investments.
Note 5. Property and Equipment
Property and equipment is composed of the following.
 March 31,
2024
December 31,
2023
Land$138,076 $139,897 
Buildings156,694 151,716 
Land and leasehold improvements150,244 149,795 
Equipment212,706 212,424 
Oil and gas properties145,078 145,065 
Construction in progress845 1,629 
 803,643 800,526 
Less accumulated depreciation, depletion, and amortization(426,280)(420,035)
Property and equipment, net$377,363 $380,491 
Depletion expense related to oil and gas properties was $2,568 and $2,648 during the first quarter of 2024 and 2023, respectively.
The Company recorded an impairment to restaurant long-lived assets of $107 in the first quarter of 2024 and $776 in the first quarter of 2023 related to underperforming stores.
Property and equipment held for sale of $1,149 and $773 are recorded in other current assets as of March 31, 2024, and December 31, 2023, respectively. The assets classified as held for sale include properties owned by Steak n Shake, which were previously company-operated restaurants.
During the first quarter of 2024 and 2023, the Company sold former company-operated restaurants for a gain of $767 and $1,431, respectively.
8

Note 6. Goodwill and Other Intangible Assets
Goodwill
Goodwill consists of the excess of the purchase price over the fair value of the net assets acquired in connection with business acquisitions.
A reconciliation of the change in the carrying value of goodwill is as follows.
 Goodwill
Goodwill at December 31, 2023
Goodwill $53,830 
Accumulated impairment losses(300)
$53,530 
Change in foreign exchange rates during the first quarter of 2024(9)
Goodwill at March 31, 2024
$53,521 

Goodwill and indefinite-lived intangible asset impairment reviews include determining the estimated fair values of our reporting units and indefinite-lived intangible assets. The key assumptions and inputs used in such determinations may include forecasting revenues and expenses, cash flows and capital expenditures, as well as an appropriate discount rate and other inputs. Significant judgment by management is required in estimating the fair value of a reporting unit and in performing impairment reviews. Due to the inherent subjectivity and uncertainty in forecasting future cash flows and earnings over long periods of time, actual results may differ materially from the forecasts. If the carrying value of the indefinite-lived intangible asset exceeds fair value, the excess is charged to earnings as an impairment loss. If the carrying value of a reporting unit exceeds the estimated fair value of the reporting unit, then the excess, limited to the carrying amount of goodwill, will be charged to earnings as an impairment loss. There was no impairment recorded for goodwill during the first quarters of 2024 or 2023.
Other Intangible Assets
Intangible assets with indefinite lives are composed of the following.
 Trade NamesLease RightsTotal
Balance at December 31, 2023
Intangibles$15,876 $11,102 $26,978 
Accumulated impairment losses (3,748)(3,748)
$15,876 $7,354 $23,230 
Change in foreign exchange rates during the first quarter of 2024 (109)(109)
Balance at March 31, 2024
$15,876 $7,245 $23,121 
Note 7. Restaurant Operations Revenues
Restaurant operations revenues were as follows.
 First Quarter
 20242023
Net sales$38,735 $36,894 
Franchise partner fees17,758 17,912 
Franchise royalties and fees3,477 4,258 
Other2,026 2,065 
 $61,996 $61,129 
Net Sales
Net sales are composed of retail sales of food through company-operated stores. Company-operated store revenues are recognized, net of discounts and sales taxes, when our obligation to perform is satisfied at the point of sale. Sales taxes related to these sales are collected from customers and remitted to the appropriate taxing authority and are not reflected in the Company’s consolidated statements of earnings as revenue.
9

Note 7. Restaurant Operations Revenues (continued)

Franchise Partner Fees
Franchise partner fees are composed of up to 15% of sales as well as 50% of profits. We are therefore fully affected by the operating results of the business, unlike in a traditional franchising arrangement, where the franchisor obtains a royalty fee based on sales only. We generate most of our revenue from our share of the franchise partners’ profits. An initial franchise fee of ten thousand dollars is recognized when the operator becomes a franchise partner. The Company recognizes franchise partner fees monthly as underlying restaurant sales occur.
The Company leases or subleases property and equipment to franchise partners under lease arrangements. Both real estate and equipment rental payments are charged to franchise partners and are recognized in accordance with ASC 842, “Leases”. During the first quarter of 2024 and 2023, restaurant operations recognized $5,705 and $5,575, respectively, in franchise partner fees related to rental income.
Franchise Royalties and Fees
Franchise royalties and fees from Steak n Shake and Western Sizzlin franchisees are based upon a percentage of sales of the franchise restaurant and are recognized as earned. Franchise royalties are billed on a monthly basis. Initial franchise fees when a new restaurant opens or at the start of a new franchise term are recorded as deferred revenue when received and recognized as revenue over the term of the franchise agreement.
Other Revenue
Restaurant operations sell gift cards to customers which can be redeemed for retail food sales within our stores. Gift cards are recorded as deferred revenue when issued and are subsequently recorded as net sales upon redemption. Restaurant operations estimate breakage related to gift cards when the likelihood of redemption is remote. This estimate utilizes historical trends based on the vintage of the gift card. Breakage on gift cards is recorded as other revenue in proportion to the rate of gift card redemptions by vintage.
Note 8. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses include the following.
 March 31,
2024
December 31,
2023
Accounts payable$21,829 $22,448 
Gift cards and other marketing5,877 7,089 
Insurance accruals2,318 2,565 
Compensation14,015 12,821 
Deferred revenue7,066 5,314 
Taxes payable14,672 11,050 
Oil and gas payable3,751 3,560 
Other3,283 1,896 
Accounts payable and accrued expenses$72,811 $66,743 

Note 9. Line of Credit and Note Payable
Biglari Holdings Line of Credit
Biglari Holdings’ available line of credit is $30,000. The line of credit matures on September 12, 2024. The line of credit includes customary covenants, as well as financial maintenance covenants. There was no balance on the line of credit on March 31, 2024, or December 31, 2023.
Western Sizzlin Revolver
Western Sizzlin’s available line of credit is $500. As of March 31, 2024, and December 31, 2023, Western Sizzlin had no debt outstanding under its revolver.
10

Note 10. Unpaid Loss and Loss Adjustment Expenses
Our liabilities for unpaid losses and loss adjustment expenses (also referred to as “claim liabilities”) under insurance contracts are based upon estimates of the ultimate claim costs associated with claim occurrences as of the balance sheet date and include estimates for incurred-but-not-reported (“IBNR”) claims. A reconciliation of the changes in claim liabilities, net of reinsurance, for each of the three-month periods ended March 31, 2024 and 2023 follows.
March 31,March 31,
20242023
Balances at beginning of year:
Gross liabilities$16,105 $17,520 
Reinsurance recoverable on unpaid losses(937)(715)
Net liabilities15,168 16,805 
Incurred losses and loss adjustment expenses:
Current accident year14,197 10,247 
Prior accident years(3,319)(1,651)
Total10,878 8,596 
Paid losses and loss adjustment expenses:
Current accident year7,031 4,433 
Prior accident years3,002 5,454 
Total10,033 9,887 
Balances at March 31:
Net liabilities16,013 15,514 
Reinsurance recoverable on unpaid losses687 2,207 
Gross liabilities$16,700 $17,721 
We recorded net reductions of estimated ultimate liabilities for prior accident years of $3,319 and $1,651 in the first quarter of 2024 and 2023, respectively, which produced corresponding reductions in incurred losses and loss adjustment expenses in those periods. These reductions as a percentage of the net liabilities at the beginning of each year were 21.9% in 2024 and 9.8% in 2023.
Note 11. Lease Assets and Obligations
Lease obligations include the following.
Current portion of lease obligationsMarch 31,
2024
December 31,
2023
Finance lease liabilities$1,251 $1,258 
Finance obligations4,564 4,826 
Operating lease liabilities8,704 8,771 
Total current portion of lease obligations$14,519 $14,855 
Long-term lease obligations
Finance lease liabilities$3,645 $3,581 
Finance obligations60,127 56,471 
Operating lease liabilities28,140 26,337 
Total long-term lease obligations$91,912 $86,389 
11

Note 11. Lease Assets and Obligations (continued)
Nature of Leases
Steak n Shake and Western Sizzlin operate restaurants that are located on sites owned by us or leased from third parties. In addition, they own sites and lease sites from third parties that are leased and/or subleased to franchisees.
Lease Costs
A significant portion of our operating and finance lease portfolio includes restaurant locations. We recognize fixed lease expense for operating leases on a straight-line basis over the lease term. For finance leases, we recognize amortization expense on the right-of-use asset and interest expense on the lease liability over the lease term.
Total lease cost consists of the following.
First Quarter
20242023
Finance lease costs:
Amortization of right-of-use assets$226 $242 
Interest on lease liabilities84 91 
Operating and variable lease costs2,829 3,167 
Sublease income(2,989)(3,091)
Total lease costs$150 $409 
Supplemental cash flow information related to leases is as follows.
 First Quarter
 20242023
Cash paid for amounts included in the measurement of lease liabilities:  
Financing cash flows from finance leases$326 $344 
Operating cash flows from finance leases$84 $91 
Operating cash flows from operating leases$2,666 $3,355 


Supplemental balance sheet information related to leases is as follows.
March 31,
2024
December 31,
2023
Finance leases:
Property and equipment, net$3,644 $3,574 
Weighted-average lease terms and discount rates are as follows.
March 31,
2024
Weighted-average remaining lease terms:
Finance leases4.79 years
Operating leases5.82 years
Weighted-average discount rates:
Finance leases7.0 %
Operating leases7.0 %
12

Note 11. Lease Assets and Obligations (continued)
Maturities of lease liabilities as of March 31, 2024 are as follows.
YearOperating
Leases
Finance
Leases
Remainder of 2024$8,368 $1,134 
20259,697 1,486 
20267,215 1,163 
20274,927 828 
20284,108 437 
After 202810,307 728 
Total lease payments44,622 5,776 
Less interest7,778 880 
Total lease liabilities$36,844 $4,896 
Lease Income
The components of lease income are as follows.
First Quarter
20242023
Operating lease income$4,181 $4,085 
Variable lease income1,799 1,784 
Total lease income$5,980 $5,869 

The following table displays the Company’s future minimum rental receipts for non-cancelable leases and subleases as of March 31, 2024. Franchise partner leases and subleases are short-term leases and have been excluded from the table.

Operating Leases
YearSubleasesOwned Properties
Remainder of 2024$457 $297 
2025544 404 
2026225 406 
2027206 415 
202886 424 
After 2028 2,435 
Total future minimum receipts$1,518 $4,381 
Note 12. Income Taxes
In determining the quarterly provision for income taxes, the Company used an estimated annual effective tax rate for the first quarter of 2024 and 2023. Our periodic effective income tax rate is affected by the relative mix of pre-tax earnings or losses and underlying income tax rates applicable to the various taxing jurisdictions.
Income tax expense for the first quarter of 2024 was $6,816 compared to $19,738 for the first quarter of 2023. The variance in income taxes between 2024 and 2023 is primarily attributable to taxes on income generated by the investment partnerships. Investment partnership pre-tax gains were $21,985 during the first quarter of 2024 compared to pre-tax gains of $72,588 during the first quarter of 2023. 
13

Note 13. Commitments and Contingencies

We are involved in various legal proceedings and have certain unresolved claims pending. We believe, based on examination of these matters and experiences to date, that the ultimate liability, if any, in excess of amounts already provided in our consolidated financial statements, is not likely to have a material effect on our results of operations, financial position or cash flow.
Note 14. Fair Value of Financial Assets
The fair values of substantially all of our financial instruments were measured using market or income approaches. Considerable judgment may be required in interpreting market data used to develop the estimates of fair value. Accordingly, the fair values presented are not necessarily indicative of the amounts that could be realized in an actual current market exchange. The use of alternative market assumptions and/or estimation methodologies may have a material effect on the estimated fair value.
The hierarchy for measuring fair value consists of Levels 1 through 3, which are described below.
Level 1 – Inputs represent unadjusted quoted prices for identical assets or liabilities exchanged in active markets. 
Level 2 – Inputs include directly or indirectly observable inputs (other than Level 1 inputs) such as quoted prices for similar assets or liabilities exchanged in active or inactive markets; quoted prices for identical assets or liabilities exchanged in inactive markets; other inputs that may be considered in fair value determinations of the assets or liabilities, such as interest rates and yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Pricing evaluations generally reflect discounted expected future cash flows, which incorporate yield curves for instruments with similar characteristics, such as credit ratings, estimated durations, and yields for other instruments of the issuer or entities in the same industry sector.
Level 3 – Inputs include unobservable inputs used in the measurement of assets and liabilities. Management is required to use its own assumptions regarding unobservable inputs because there is little, if any, market activity in the assets or liabilities and we may be unable to corroborate the related observable inputs. Unobservable inputs require management to make certain projections and assumptions about the information that would be used by market participants in pricing assets or liabilities.
The following methods and assumptions were used to determine the fair value of each class of the following assets recorded at fair value in the consolidated balance sheets:
Cash equivalents: Cash equivalents primarily consist of money market funds which are classified as Level 1 of the fair value hierarchy.
Equity securities: The Company’s investments in equity securities are classified as Level 1 of the fair value hierarchy. 
Bonds: The Company’s investments in bonds consist of both corporate and government debt. Bonds are classified as Level l of the fair value hierarchy.
14

Note 14. Fair Value of Financial Assets (continued)
As of March 31, 2024, and December 31, 2023, the fair values of financial assets were as follows.
March 31, 2024December 31, 2023
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Assets
Cash equivalents$4,100 $ $ $4,100 $2,374 $ $ $2,374 
Equity securities
Consumer goods28,193   28,193 26,660   26,660 
Other4,083   4,083 3,171   3,171 
Bonds
Government65,041   65,041 61,536   61,536 
Corporate879   879 3,199   3,199 
Total assets at fair value$102,296 $ $ $102,296 $96,940 $ $ $96,940 
There were no changes in our valuation techniques used to measure fair values on a recurring basis.
Note 15. Related Party Transactions
Service Agreement
The Company is party to a service agreement with Biglari Enterprises LLC (“Biglari Enterprises”), under which Biglari Enterprises provides business and administrative related services to the Company. Biglari Enterprises is owned by Mr. Biglari.

The Company paid Biglari Enterprises $2,400 and $2,100 in service fees during the first quarter of 2024 and 2023, respectively. The service agreement does not alter the hurdle rate connected with the incentive reallocation paid to Biglari Capital Corp.  
Incentive Agreement
The Incentive Agreement establishes a performance-based annual incentive payment for Mr. Biglari contingent upon the growth in adjusted equity in each year attributable to our operating businesses. In order for Mr. Biglari to receive any incentive, our operating businesses must achieve an annual increase in shareholders’ equity in excess of 6% (the “hurdle rate”) above the previous highest level (the “high-water mark”). Mr. Biglari will receive 25% of any incremental book value created above the high-water mark plus the hurdle rate.
Note 16. Business Segment Reporting
Our reportable business segments are organized in a manner that reflects how management views those business activities. Our restaurant operations include Steak n Shake and Western Sizzlin. Our insurance operations include First Guard and Southern Pioneer. Our oil and gas operations include Southern Oil and Abraxas Petroleum. The Company also reports segment information for Maxim. 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.
15

Note 16. Business Segment Reporting (continued)


A disaggregation of our consolidated data for the first quarters of 2024 and 2023 is presented in the tables which follow.
Revenues
First Quarter
20242023
Operating Businesses:
Restaurant Operations:
Steak n Shake$59,354 $58,487 
Western Sizzlin2,642 2,642 
Total Restaurant Operations61,996 61,129 
Insurance Operations:
Underwriting:
First Guard9,310 8,899 
Southern Pioneer6,612 5,865 
Investment income and other1,811 1,465 
Total Insurance Operations17,733 16,229 
Oil and Gas Operations:
Abraxas Petroleum5,868 7,252 
Southern Oil3,642 4,971 
Total Oil and Gas Operations9,510 12,223 
Maxim212 595 
$89,451 $90,176 


16

Note 16. Business Segment Reporting (continued)


 Earnings (Loss) Before Income Taxes
 First Quarter
 20242023
Operating Businesses:
Restaurant Operations:
Steak n Shake$4,237 $7,325 
Western Sizzlin641 472 
Total Restaurant Operations4,878 7,797 
Insurance Operations:
Underwriting:
First Guard800 1,862 
Southern Pioneer59 (111)
Investment income and other1,387 1,036 
Total Insurance Operations2,246 2,787 
Oil and Gas Operations:
Abraxas Petroleum1,387 1,209 
Southern Oil79 894 
Total Oil and Gas Operations1,466 2,103 
Maxim(354)122 
Interest expense not allocated to segments (167)
Total Operating Businesses8,236 12,642 
Corporate and other(2,539)(3,593)
Investment gains1,713 3,638 
Investment partnership gains21,985 72,588 
 $29,395 $85,275 
17


Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations 
(dollars in thousands except per share data)
Overview
Biglari Holdings Inc. is a holding company owning subsidiaries engaged in a number of diverse business activities, including property and casualty insurance, licensing and media, restaurants, and oil and gas. Biglari Holdings is founded and led by Sardar Biglari, Chairman and Chief Executive Officer of the Company.

Biglari Holdings’ management system combines decentralized operations with centralized financial decision-making. Operating decisions for the various business units are made by their respective managers. All major investment and capital allocation decisions are made for the Company and its subsidiaries by Mr. Biglari.
As of March 31, 2024, Mr. Biglari beneficially owns shares of the Company that represent approximately 71.5% of the voting interest.
Net earnings (loss) attributable to Biglari Holdings Inc. shareholders are disaggregated in the table that follows. Amounts are recorded after deducting income taxes. 
 First Quarter
 20242023
Operating businesses: 
Restaurant$3,473 $5,840 
Insurance1,738 2,169 
Oil and gas1,149 1,670 
Brand licensing(265)91 
Interest expense— (129)
Corporate and other(1,996)(2,998)
Total operating businesses4,099 6,643 
Investment partnership gains17,148 56,029 
Investment gains1,332 2,865 
Net earnings22,579 65,537 
Earnings attributable to noncontrolling interest— 651 
Net earnings attributable to Biglari Holdings Inc. shareholders$22,579 $64,886 
18


Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Restaurants
Our restaurant businesses, which include Steak n Shake and Western Sizzlin, comprise 485 company-operated and franchise restaurants as of March 31, 2024.
Steak n ShakeWestern Sizzlin
 Company-
operated
Franchise
Partner
Traditional
Franchise
Company-
operated
FranchiseTotal
Total stores as of December 31, 2023
148 181 128 32 492 
Corporate stores transitioned(3)— — — — 
Net restaurants opened (closed)(3)— (3)— (1)(7)
Total stores as of March 31, 2024
148 178 125 31 485 
Total stores as of December 31, 2022
177 175 154 36 545 
Corporate stores transitioned(3)— — — — 
Net restaurants opened (closed)(2)— (11)— — (13)
Total stores as of March 31, 2023
172 178 143 36 532 
As of March 31, 2024, 15 of the 148 company-operated Steak n Shake stores were closed. Steak n Shake plans to sell or lease 9 of the 15 locations and refranchise the balance.

19


Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Restaurant operations are summarized below.
First Quarter
20242023
Revenue
Net sales$38,735 $36,894 
Franchise partner fees17,758 17,912 
Franchise royalties and fees3,477 4,258 
Other revenue2,026 2,065 
Total revenue61,996 61,129 
Restaurant cost of sales
Cost of food10,974 28.3 %10,448 28.3 %
Labor costs12,429 32.1 %11,603 31.4 %
Occupancy and other11,018 28.4 %10,687 29.0 %
Total cost of sales34,421 32,738 
Selling, general and administrative
General and administrative11,730 18.9 %10,463 17.1 %
Marketing2,945 4.8 %2,953 4.8 %
Other expenses (income)(234)(0.4)%(1,612)(2.6)%
Total selling, general and administrative14,441 23.3 %11,804 19.3 %
Impairments107 0.2 %776 1.3 %
Depreciation and amortization6,835 11.0 %6,707 11.0 %
Interest on finance leases and obligations1,314 1,307 
Earnings before income taxes4,878 7,797 
Income tax expense1,405 1,957 
Contribution to net earnings$3,473 $5,840 
Cost of food, labor costs, and occupancy and other costs are expressed as a percentage of net sales. 
General and administrative, marketing, other expenses, impairments, and depreciation are expressed as a percentage of total revenue.

Net sales for the first quarter of 2024 were $38,735 as compared to $36,894 during the first quarter of 2023. The increase in net sales was primarily due to an increase in Steak n Shake’s same-store sales of 9.9% during the first quarter of 2024.

For company-operated units, sales to the end customer are recorded as revenue generated by the Company, but for franchise partner units, only our share of the restaurant’s profits, along with certain fees, are recorded as revenue. Because we derive most of our revenue from our share of the profits, revenue will decline as we transition from company-operated units to franchise partner units.
Our franchise partner fees were $17,758 during the first quarter of 2024, as compared to $17,912 during the first quarter of 2023. As of March 31, 2024 and 2023, there were 178 franchise partner units. Included in franchise partner fees were $5,705 and $5,575 of rental income during the first quarter of 2024 and 2023, respectively. Franchise partners rent buildings and equipment from Steak n Shake. Our share of franchise partner fees was lower primarily because our franchise partners’ food and labor expenses were 1.8 percentage points higher during the first quarter of 2024 as compared to the first quarter of 2023.


20


Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
The franchise royalties and fees generated by the traditional franchising business were $3,477 during the first quarter of 2024, as compared to $4,258 during the first quarter of 2023. The decrease in franchise royalties and fees was primarily due to the closing of traditional franchise stores. There were 125 Steak n Shake traditional units open on March 31, 2024, as compared to 143 units open on March 31, 2023.
The cost of food at company-operated units during the first quarter of 2024 was $10,974 or 28.3% of net sales, as compared to $10,448 or 28.3% of net sales during the first quarter of 2023. The cost of food expressed as a percentage of net sales in 2024 remained consistent with 2023.

Labor costs at company-operated restaurants during the first quarter of 2024 were $12,429 or 32.1% of net sales, as compared to $11,603 or 31.4% of net sales during the first quarter of 2023. Labor costs expressed as a percentage of net sales in 2024 remained consistent with 2023.
General and administrative expenses during the first quarter of 2024 were $11,730 or 18.9% of total revenue, as compared to $10,463 or 17.1% of total revenue during the first quarter of 2023. General and administrative expenses increased in 2024 as compared to 2023 primarily because of higher salaries and wages. Salaries and wages were higher due to an increase in Steak n Shake’s personnel.
Interest on obligations under leases was $1,314 during the first quarter of 2024 versus $1,307 during the first quarter of 2023.
Other income was $234 during the first quarter of 2024 versus $1,612 during the first quarter of 2023. Western Sizzlin received a settlement of $450 during 2024 and Steak n Shake recorded gains of sales of properties of $1,431 during 2023.
To better convey the performance of the franchise partnership model, the table below shows the underlying sales, cost of food, labor costs, and other restaurant costs of the franchise partners. We believe the franchise partner information is useful to readers, as they have a direct effect on Steak n Shake’s profitability.
First Quarter
20242023
Revenue
Net sales and other$80,788 $77,952 
Restaurant cost of sales
Cost of food$23,170 28.7 %$20,871 26.8 %
Labor costs21,765 26.9 %20,940 26.9 %
Occupancy and other16,778 20.8 %15,867 20.4 %
Total cost of sales$61,713 $57,678 

The Company’s consolidated financial statements do not include data in the table above. Figures are shown for information purposes only.
Insurance
We view our insurance businesses as possessing two activities: underwriting and investing. Underwriting decisions are the responsibility of the unit managers, whereas investing decisions are the responsibility of our Chairman and CEO, Sardar Biglari. Our business units are operated under separate local management. Biglari Holdings’ insurance operations consist of First Guard and Southern Pioneer.

21


Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Underwriting results of our insurance operations are summarized below.
First Quarter
20242023
Underwriting gain attributable to:
First Guard$800 $1,862 
Southern Pioneer59 (111)
Pre-tax underwriting gain859 1,751 
Income tax expense180 368 
Net underwriting gain$679 $1,383 

Earnings of our insurance operations are summarized below.
First Quarter
20242023
Premiums earned$15,922 $14,764 
Insurance losses10,878 8,596 
Underwriting expenses4,185 4,417 
Pre-tax underwriting gain859 1,751 
Other income and expenses 
Investment income915 585 
Other income and expenses472 451 
Total other income1,387 1,036 
Earnings before income taxes2,246 2,787 
Income tax expense508 618 
Contribution to net earnings$1,738 $2,169 
Insurance premiums and other on the consolidated statement of earnings includes premiums earned, investment income, other income, and commissions.

First Guard

First Guard is a direct underwriter of commercial truck insurance, selling physical damage and nontrucking liability insurance to truckers. First Guard’s insurance products are marketed primarily through direct response methods via the Internet or by telephone. First Guard’s cost-efficient direct response marketing methods enable it to be a low-cost insurer. A summary of First Guard’s underwriting results follows.
First Quarter
20242023
Amount%Amount%
Premiums earned$9,310 100.0 %$8,899 100.0 %
Insurance losses6,775 72.8 %5,244 58.9 %
Underwriting expenses1,735 18.6 %1,793 20.1 %
Total losses and expenses8,510 91.4 %7,037 79.0 %
Pretax underwriting gain$800 $1,862 

First Guard produced an underwriting gain in the first quarter of 2024, despite having a higher ratio of losses and loss adjustment expenses to premiums earned (72.8%) than it had during the first quarter of 2023 (58.9%).
22


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

Southern Pioneer

Southern Pioneer underwrites garage liability and commercial property insurance, as well as homeowners and dwelling fire insurance. A summary of Southern Pioneer’s underwriting results follows.
First Quarter
20242023
Amount%Amount%
Premiums earned$6,612 100.0 %$5,865 100.0 %
Insurance losses4,103 62.1 %3,352 57.2 %
Underwriting expenses2,450 37.0 %2,624 44.7 %
Total losses and expenses6,553 99.1 %5,976 101.9 %
Pretax underwriting gain (loss)$59 $(111)
Southern Pioneer’s underwriting gain was primarily attributable to a lower expense ratio. The prior year’s higher expense ratio was caused by information technology projects related to the implementation of a new policy administration system.
A summary of net investment income attributable to our insurance operations follows.
First Quarter
20242023
Interest, dividends and other investment income:
First Guard$570 $387 
Southern Pioneer345 198 
Pre-tax investment income915 585 
Income tax expense192 123 
Net investment income$723 $462 
We consider investment income as a component of our aggregate insurance operating results. However, we consider investment gains and losses, whether realized or unrealized, as non-operating.
23


Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Oil and Gas
A summary of revenues and earnings of our oil and gas operations follows.
First Quarter
20242023
Oil and gas revenues$9,510 $12,223 
Oil and gas production costs4,499 5,471 
Depreciation, depletion and accretion2,792 2,850 
Gain on sale of properties(481)— 
General and administrative expenses1,234 1,799 
Earnings before income taxes1,466 2,103 
Income tax expense317 433 
Contribution to net earnings$1,149 $1,670 
Our oil and gas business is highly dependent on oil and natural gas prices. The lower natural gas prices and lower production during 2024 caused decreases in revenues and production costs. Production decreases were primarily because several gas wells were shut-in along with the natural depletion of oil and gas reserves.
During the third quarter of 2023, Abraxas Petroleum entered into a royalty-based arrangement with an unaffiliated party to conduct development activities; however, Abraxas Petroleum will not be required to fund any exploration expenditures on its undeveloped properties. In the first quarter of 2024, Abraxas Petroleum sold additional undeveloped reserves, which resulted in a gain of $481.
Abraxas Petroleum
Abraxas Petroleum operates oil and gas properties in the Permian Basin of West Texas. Earnings for Abraxas Petroleum are summarized below.
First Quarter
20242023
Oil and gas revenues$5,868 $7,252 
Oil and gas production costs2,819 3,131 
Depreciation, depletion and accretion1,547 1,666 
Gain on sale of properties(481)— 
General and administrative expenses596 1,246 
Earnings before income taxes1,387 1,209 
Income tax expense319 278 
Contribution to net earnings$1,068 $931 
24


Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Southern Oil
Southern Oil primarily operates oil and natural gas properties offshore in the shallow waters of the Gulf of Mexico. Earnings for Southern Oil are summarized below.
First Quarter
20242023
Oil and gas revenues$3,642 $4,971 
Oil and gas production costs1,680 2,340 
Depreciation, depletion and accretion1,245