UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K Indiana 82-3784946 (State or other jurisdiction of incorporation) (I.R.S. Employer Identification No.) Title of each class Trading Symbols Name of each exchange on which registered Class A Common Stock, no par value BH.A New York Stock Exchange Class B Common Stock, no par value BH New York Stock Exchange Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incenti ...

| --- | --- | --- | |----------------------------|---------------------|-------------------------------------------------------| | Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | | Class A common stock | BH.A | New York Stock Exchange | | Class B common stock | BH | New York Stock Exchange | 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 account ...

San Antonio, TX, Feb. 24, 2024 /PRNewswire/ -- Biglari Holdings Inc.'s (NYSE: BH.A; BH) 2023 Annual Report to the shareholders has been posted on the Internet, where it can be accessed at www.biglariholdings.com. The report includes Sardar Biglari's annual letter to shareholders. Biglari Holdings Inc.'s earnings for the fourth quarter and full year of 2023 and 2022 are summarized below.  To become fully apprised of our results, shareholders should carefully study our 10-K, which has been posted at www.bigla ...

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” (Excellent) of First Guard Insurance Company (First Guard) (Scottsdale, AZ). The outlook of these Credit Ratings (ratings) is stable. First Guard is a subsidiary of Biglari Holdings Inc. [NYSE: BH]. The ratings reflect First Guard’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profil ...

FORM 10-Q ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 BIGLARI HOLDINGS INC. (Exact name of registrant as specified in its charter) | --- | --- | --- | |----------------------------------------------------------------------|----------------------------------------------------|-------------------------------------------------------| | 19100 Ridgewood Parkway, Suite \nSan Antonio, Texas | 1200 | 78259 | | (Address of principal executive offices) | | (Zip Code) | | ...

Table of Contents | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |--------------------------------------|-------|--------|--------|---------|--------|----------|--------------------|--------|---------| | | | 2023 | Second | Quarter | \n2022 | Revenues | First Six \n2023 | Months | 2022 | | Operating Businesses: | | | | | | | | | | | Restaurant Operations: | | | | | | | | | | | Steak n Shake | $ | 61,577 | | $ | 57,742 | $ | 120,064 | $ | 115,495 | | Western Sizzlin | | 2,914 | | | 2,582 | | 5 ...

Financial Performance - Net sales for Q1 2023 were $36,894, a decrease of $1,322 or 3.5% compared to Q1 2022, primarily due to the transition from company-operated units to franchise partner units [38]. - Total revenue for Q1 2023 was $61,129, an increase from $59,847 in Q1 2022 [37]. - Net earnings attributable to Biglari Holdings Inc. shareholders were $64,886 in Q1 2023, compared to a loss of $298 in Q1 2022 [44]. - The company reported investment partnership pre-tax gains of $72,588 in Q1 2023, compared to pre-tax losses of $6,661 in Q1 2022 [16]. Franchise Operations - Franchise partner fees increased to $17,912 in Q1 2023 from $15,624 in Q1 2022, with 178 franchise partner units as of March 31, 2023, compared to 171 units a year earlier [39]. - The franchise royalties and fees from traditional franchising were $4,258 in Q1 2023, down from $5,146 in Q1 2022, attributed to reduced marketing by franchisees [50]. - As of March 31, 2023, 36 of the 172 company-operated Steak n Shake stores were closed, with plans to refranchise the remaining closed restaurants [35]. Cost Management - The cost of food at company-operated units was $10,448 or 28.3% of net sales in Q1 2023, slightly down from $10,960 or 28.7% in Q1 2022 [42]. - General and administrative expenses rose to $10,463 or 17.1% of total revenue in Q1 2023, up from $8,650 or 14.5% in Q1 2022, mainly due to increased support for franchise partnerships [51]. - Operating costs at company-operated restaurants were $18,457, or 50.0% of net sales, down from $20,032, or 52.4% of net sales in Q1 2022, primarily due to lower labor costs [58]. Investment Activities - The company purchased Series A Preferred Stock of Abraxas Petroleum for $80 million and exchanged it for 90% of the outstanding common stock of Abraxas Petroleum [43]. - Steak n Shake sold a former company-operated restaurant property for a gain of $1,431 in Q1 2023 [52]. - The company recorded impairment charges of $776 in Q1 2023, compared to no impairments in Q1 2022 [52]. Insurance Operations - Southern Pioneer's premiums earned were $5,865 in Q1 2023, up from $5,438 in Q1 2022, with insurance losses decreasing to $3,352, or 57.2% of premiums earned [57]. - First Guard's underwriting gain increased to $1,862 in Q1 2023 from $732 in Q1 2022, with a loss ratio of 58.9% compared to 70.9% in the prior year [61][73]. - Investment income for insurance operations was $585 in Q1 2023, compared to $213 in Q1 2022, contributing to a net investment income of $462 [75]. Cash Flow and Liquidity - Net cash provided by operating activities for Q1 2023 was $19,923, down from $21,092 in Q1 2022, reflecting a decrease of about 5.6% [104]. - Net cash used in investing activities was $12,735 in Q1 2023, compared to $16,077 in Q1 2022, showing a reduction of approximately 20% [104]. - The line of credit balance on March 31, 2023, was $6,500, with the total line of credit available being $30,000, indicating ongoing liquidity management [95]. - Biglari Holdings had a line of credit balance of $6,500 as of March 31, 2023, with an interest rate of 7.3% [84]. - The increase in cash, cash equivalents, and restricted cash in Q1 2023 was $2,146, compared to an increase of $3,428 in Q1 2022, indicating a decline in cash growth [104]. - The company continues to review available financing alternatives to meet working capital needs, emphasizing proactive financial management [104]. Market Conditions - Oil and gas revenues for Q1 2023 were $12,223, up from $9,812 in Q1 2022, but net earnings decreased to $1,670 from $2,924 [70]. - The average West Texas Intermediate price per barrel was approximately $76.11 in Q1 2023, down from $94.82 in Q1 2022, indicating volatility in oil and gas prices [70]. - Corporate and other net losses remained consistent in Q1 2023 compared to the same period in 2022 [85].

The following table presents shares authorized, issued, and outstanding. | --- | --- | --- | --- | --- | --- | --- | |---------------------------------------------|----------------------|--------------------------|----------------------|--------------------------|----------------------|------------------------| | | December \nClass A | 31, 2022 \nClass B | December \nClass A | 31, 2021 \nClass B | December \nClass A | 31, 2020 \nClass B | | Common stock authorized | 500,000 | 10,000,000 | 500,000 | 10,000,0 ...

[Part I – Financial Information](index=4&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Biglari Holdings Inc.'s unaudited consolidated financial statements for Q3 and the first nine months of 2022, including balance sheets, earnings, cash flows, and notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to $862.1 million from $894.8 million, mainly due to lower investment partnership values, while total shareholders' equity declined to $545.4 million Consolidated Balance Sheets (in thousands) | Account | Sep 30, 2022 (Unaudited) | Dec 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$862,145** | **$894,807** | | Cash and cash equivalents | $64,842 | $42,349 | | Investment partnerships | $144,864 | $250,399 | | **Total Liabilities** | **$316,737** | **$307,111** | | Line of credit | $30,000 | $— | | **Total Shareholders' Equity** | **$545,408** | **$587,696** | [Consolidated Statements of Earnings](index=5&type=section&id=Consolidated%20Statements%20of%20Earnings) The company reported a Q3 2022 net income of $32.0 million, a turnaround from a $10.7 million loss, driven by investment partnership gains, but a nine-month net loss of $42.1 million Consolidated Statements of Earnings (in thousands) | Metric | Q3 2022 (Unaudited) | Q3 2021 (Unaudited) | First Nine Months 2022 (Unaudited) | First Nine Months 2021 (Unaudited) | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$92,034** | **$82,083** | **$269,773** | **$267,158** | | Restaurant operations | $59,437 | $59,144 | $179,608 | $196,424 | | Investment partnership gains (losses) | $29,658 | $(20,231) | $(82,244) | $27,344 | | **Net Earnings (Loss) Attributable to BH** | **$32,005** | **$(10,669)** | **$(42,073)** | **$40,301** | | **Net Earnings (Loss) per Class A Share** | **$109.13** | **$(33.74)** | **$(140.30)** | **$125.79** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities decreased to $99.8 million, while investing activities used $102.5 million due to an acquisition, and financing provided $25.4 million from a new credit line Consolidated Statements of Cash Flows (in thousands) | Activity | First Nine Months 2022 (Unaudited) | First Nine Months 2021 (Unaudited) | | :--- | :--- | :--- | | Net cash provided by operating activities | $99,754 | $211,245 | | Net cash used in investing activities | $(102,464) | $(55,782) | | Net cash provided by (used in) financing activities | $25,353 | $(154,586) | | **Increase in cash** | **$22,493** | **$792** | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, business segments, the Abraxas Petroleum acquisition, and the significant impact of investment partnerships on earnings - On September 14, 2022, the company acquired Abraxas Petroleum Corporation for **$80 million**, funded by working capital and a line of credit, now a consolidated entity[26](index=26&type=chunk) - Investment partnerships generated a pre-tax gain of **$29.7 million** in Q3 2022 versus a loss of **$20.2 million** in Q3 2021, but recorded a pre-tax loss of **$82.2 million** for the first nine months of 2022 compared to a gain of **$27.3 million** in the prior year[43](index=43&type=chunk) Segment Revenue (in thousands) | Segment Revenue | Q3 2022 | Q3 2021 | | :--- | :--- | :--- | | Restaurant Operations | $59,437 | $59,144 | | Insurance Operations | $16,312 | $14,723 | | Oil and Gas Operations | $14,380 | $7,353 | | Maxim (Licensing/Media) | $1,905 | $863 | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=26&type=section&id=Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20%28MD%26A%29) Management discusses performance by segment, financial condition, liquidity, and cash flow changes, including the Abraxas Petroleum acquisition and new line of credit - The company's net earnings are highly volatile due to the significant impact of investment partnership gains and losses, which are recorded in the income statement[107](index=107&type=chunk)[138](index=138&type=chunk) - On September 13, 2022, the company entered into a new **$30 million** revolving line of credit, fully drawn as of September 30, 2022, to help fund the Abraxas Petroleum acquisition[63](index=63&type=chunk)[152](index=152&type=chunk) [Results of Operations by Segment](index=27&type=section&id=Results%20of%20Operations%20by%20Segment) Segment performance review shows a shift in restaurant revenue to franchise fees, lower insurance underwriting gains, significant growth in oil and gas, and increased licensing revenue - The restaurant segment is transitioning to a franchise partner model, increasing 'Franchise partner fees' while decreasing 'Net sales', with **171 franchise partner units** as of September 30, 2022, up from 140 a year prior[110](index=110&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) Segment Pre-Tax Earnings (Loss) (in thousands) | Segment Pre-Tax Earnings (Loss) | Q3 2022 | Q3 2021 | | :--- | :--- | :--- | | Restaurant Operations | $4,333 | $(2,712) | | Insurance Operations | $3,092 | $3,842 | | Oil and Gas Operations | $7,241 | $2,982 | | Maxim (Licensing/Media) | $1,534 | $(56) | - First Guard's insurance underwriting gain decreased in Q3 and the first nine months of 2022 due to a higher loss ratio of **52.8%** in Q3 2022 versus 46.5% in Q3 2021, while Southern Pioneer swung to an underwriting loss[127](index=127&type=chunk)[128](index=128&type=chunk) - The Oil and Gas segment's earnings before tax increased to **$7.2 million** in Q3 2022 from **$3.0 million** in Q3 2021, driven by higher commodity prices and the contribution from the newly acquired Abraxas Petroleum[101](index=101&type=chunk)[131](index=131&type=chunk)[133](index=133&type=chunk) [Financial Condition and Liquidity](index=36&type=section&id=Financial%20Condition%20and%20Liquidity) The company maintains significant liquidity despite a decrease in cash and investments to $279.7 million due to investment partnership losses, and operating cash flow declined due to lower distributions Total Cash and Investments (Fair Value, in thousands) | Account | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $64,842 | $42,349 | | Investments | $70,032 | $83,061 | | Fair value of interest in investment partnerships | $338,314 | $474,201 | | **Total cash and investments** | **$473,188** | **$599,611** | - Net cash from operating activities decreased to **$99.7 million** in the first nine months of 2022 from **$211.2 million** in 2021, mainly because distributions from investment partnerships fell to **$51.2 million** from **$172.4 million**[149](index=149&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=38&type=section&id=Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces market risk from concentrated equity investments, with a 10% price change impacting carrying value by $21.5 million, and commodity price risk in oil and gas operations - The company holds concentrated equity positions through its investment partnerships, where a significant decline in the stock market or these specific investments could lead to a large net loss[158](index=158&type=chunk) - A hypothetical **10%** change in the market price of the company's investments would result in a corresponding change in carrying value of **$21.5 million**[159](index=159&type=chunk) - The oil and natural gas business is exposed to commodity price fluctuations, where a material decline in crude oil or natural gas prices could have a material adverse effect on operations[161](index=161&type=chunk) [Controls and Procedures](index=38&type=section&id=Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2022, with no material changes to internal control over financial reporting - The Chief Executive Officer and Controller concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by this report[162](index=162&type=chunk) [Part II – Other Information](index=39&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) [Other Information](index=39&type=section&id=Item%201.%20Legal%20Proceedings) This section covers other required disclosures, including legal proceedings referenced in Note 13, and confirms no material changes to risk factors or unregistered equity sales - Information regarding legal proceedings is incorporated by reference from Note 13 to the Consolidated Financial Statements[165](index=165&type=chunk) - There have been no material changes from the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2021[166](index=166&type=chunk)

Financial Performance - Net sales for Q2 2022 were $37,681 million, a decrease of 23.7% compared to Q2 2021, and for the first six months of 2022, net sales were $75,897 million, down 27.3% from the same period in 2021[100]. - The net contribution to earnings for Q2 2022 was $3,006 million, compared to $2,543 million in Q2 2021[100]. - Franchise royalties and fees for Q2 2022 were $5,237 million, up from $4,594 million in Q2 2021, and for the first six months, they increased to $10,383 million from $9,729 million[102]. - Franchise partner fees increased to $16,425 million in Q2 2022 from $12,383 million in Q2 2021, and for the first six months, fees rose to $32,049 million from $20,236 million[101]. Costs and Expenses - Cost of food in Q2 2022 was $11,365 million, representing 30.2% of net sales, compared to $14,727 million or 29.8% in Q2 2021[103]. - Restaurant operating costs in Q2 2022 were $20,350 million, accounting for 54.0% of net sales, compared to $22,058 million or 44.6% in Q2 2021[104]. - General and administrative costs for Q2 2022 were $10,121 million, a slight decrease from $10,481 million in Q2 2021[105]. - Marketing expenses in Q2 2022 were $3,087 million, down from $3,287 million in Q2 2021[106]. - The company recorded impairment charges of $20 million in Q2 2022, significantly lower than $261 million in Q2 2021[106]. Insurance and Underwriting - Premiums earned for the second quarter of 2022 were $9,015 million, up from $8,225 million in 2021, representing an increase of 9.6%[112]. - Insurance losses for the second quarter of 2022 were $5,465 million, which is 60.6% of premiums earned, compared to $3,809 million (46.3%) in 2021[112]. - Total losses and expenses for the second quarter of 2022 amounted to $7,301 million, which is 81.0% of premiums earned, compared to $5,266 million (64.0%) in 2021[112]. - Pre-tax underwriting gain for the second quarter of 2022 was $1,714 million, down from $2,959 million in 2021[112]. Oil and Gas Operations - Oil and gas revenue for the second quarter of 2022 was $14,440 million, significantly higher than $8,365 million in 2021, marking a 72.5% increase[115]. - Contribution to net earnings from oil and gas operations for the second quarter of 2022 was $6,369 million, compared to $2,336 million in 2021, reflecting a substantial increase[115]. Investments and Cash Flow - Consolidated cash and investments as of June 30, 2022, totaled $461,622 million, down from $599,611 million at the end of 2021[126]. - Cash provided by operating activities was $34,204 in the first six months of 2022, a decrease of 81.7% compared to $187,208 in 2021[128]. - Cash used in investing activities was $32,819 in 2022, slightly lower than $32,839 in 2021, with capital expenditures decreasing by $10,425 due to a transition to a self-service model[129]. - Cash used in financing activities was $3,134 in 2022, significantly lower than $153,136 in 2021, as the company repaid Steak n Shake's debt in 2021[130]. Market and Risk Factors - A hypothetical 10% increase or decrease in the market price of investments would result in a respective change in carrying value of $22,352, affecting shareholders' equity by approximately 3%[136]. - The company has had minimal exposure to foreign currency exchange rate fluctuations in the first six months of 2022 and 2021[137]. - Southern Oil's operations may be significantly affected by changes in oil and gas prices, which depend on various local, regional, and global events[138]. Internal Controls and Accounting Policies - There have been no material changes to critical accounting policies as disclosed in the annual report for the year ended December 31, 2021[132]. - The company has effective disclosure controls and procedures as of June 30, 2022[139]. - There have been no changes in internal control over financial reporting that materially affected the company during the quarter ended June 30, 2022[140].