Financial Results - Biglari Holdings Inc. reported its financial results for Q2 and the first six months ending June 30, 2024[4] - The press release detailing the financial results was issued on August 9, 2024[4] - The financial results include key metrics that are incorporated in the press release attached as Exhibit 99.1[4] Company Information - The company is listed on the New York Stock Exchange under the trading symbols BH.A and BH[2] - The company has not indicated that it is an emerging growth company[3] Report Details - The report is not deemed "filed" under the Securities Exchange Act of 1934, and the information is not incorporated by reference into any future filings unless explicitly stated[5] - The report was signed by Bruce Lewis, the Controller of Biglari Holdings Inc.[7]

Financial Performance - Net sales for Q2 2024 were $40,815 million, a 3.3% increase from Q2 2023, while first six months sales reached $79,550 million, up 4.1% year-over-year[93]. - Franchise partner fees decreased to $18,149 million in Q2 2024 from $19,070 million in Q2 2023, with a total of $35,907 million for the first six months of 2024 compared to $36,982 million in 2023[94]. - Franchise royalties and fees fell to $3,615 million in Q2 2024 from $4,125 million in Q2 2023, totaling $7,092 million for the first six months of 2024 versus $8,383 million in 2023[95]. - Other income decreased to $2,442 million in 2024 from $4,301 million in 2023, with notable property sales contributing to the previous year's figures[98]. - Total other income for the first six months of 2024 was $2,691 million, an increase from $2,300 million in the first six months of 2023, showing a growth of 17.0%[106]. Cost and Expenses - Cost of food as a percentage of net sales increased to 30.3% in Q2 2024 from 29.6% in Q2 2023, while for the first six months, it was 29.3% compared to 29.0% in 2023[96]. - Labor costs represented 31.8% of net sales in Q2 2024, up from 30.8% in Q2 2023, with first six months labor costs at 32.1% compared to 31.3% in 2023[96]. - General and administrative expenses rose to $13,016 million or 20.2% of total revenue in Q2 2024, compared to $10,790 million or 16.7% in Q2 2023[97]. - General and administrative expenses for Q2 2024 were $33 million, down from $54 million in Q2 2023[121]. Impairment and Losses - The company recorded impairment charges of $853 million in Q2 2023, with $107 million in the first six months of 2024 compared to $1,629 million in 2023[97]. - Investment losses net of tax for Q2 2024 were $2,159 million, a significant decline from investment gains of $276 million in Q2 2023, and for the first six months of 2024, losses were $827 million compared to gains of $3,141 million in 2023[123]. - Investment partnership losses for Q2 2024 were $79,890 million, compared to losses of $7,496 million in Q2 2023, and for the first six months of 2024, losses were $57,905 million compared to gains of $65,092 million in 2023[124]. - The total losses and expenses for Southern Pioneer in the second quarter of 2024 were $7,582 million, which is 111.5% of premiums earned, compared to 106.7% in the same quarter of 2023[110]. Insurance Operations - The pre-tax underwriting gain for the insurance operations was $546 million in Q2 2024, down from $2,704 million in Q2 2023[103]. - Premiums earned for the second quarter of 2024 were $16,291 million, an increase from $15,971 million in the same quarter of 2023, representing a growth of 2.0%[106]. - Insurance losses for the second quarter of 2024 were $10,962 million, up from $8,372 million in the second quarter of 2023, indicating a rise of 30.0%[106]. - The pre-tax underwriting gain for First Guard in the second quarter of 2024 was $1,331 million, compared to $3,155 million in the same quarter of 2023, reflecting a decrease of 57.8%[107]. - Southern Pioneer's insurance losses in the second quarter of 2024 were $4,801 million, which is 70.6% of premiums earned, compared to 61.0% in the same quarter of 2023[110]. Cash and Investments - The company's cash and cash equivalents as of June 30, 2024, were $26,897 million, down from $28,066 million at the end of 2023[131]. - Net cash provided by operating activities for the first six months of 2024 was $20,910 million, a decrease of $10,608 million compared to $31,518 million in 2023[133]. - Cash used in investing activities decreased by $8,888 million in 2024 compared to 2023, primarily due to increased proceeds from property and equipment disposals[134]. - The carrying value of cash and investments on the balance sheet as of June 30, 2024, was $279,247 million, down from $319,048 million at the end of 2023[131]. Oil and Gas Operations - Oil and gas revenues for the second quarter of 2024 were $8,671 million, down from $10,741 million in the same quarter of 2023, indicating a decline of 19.4%[115]. - The contribution to net earnings from oil and gas operations in the second quarter of 2024 was $13,369 million, compared to $2,150 million in the same quarter of 2023, reflecting a significant increase[115]. - Southern Oil's oil and gas revenues for the second quarter of 2024 were $3,679 million, down from $4,810 million in the same quarter of 2023, a decrease of 23.5%[119].

Financial Results Announcement - Biglari Holdings Inc. announced its financial results for Q1 2024, ending March 31, 2024[6]. - The company issued a press release detailing its operational results, which is attached as Exhibit 99.1[6]. - The financial results include key metrics that will be elaborated in the attached press release[6]. - The report does not include specific performance metrics or future guidance as the detailed financial results are in the press release[6]. Regulatory Compliance - The report is filed under the Securities Exchange Act of 1934, ensuring compliance with regulatory requirements[10]. - The filing does not incorporate any information as "filed" under the Securities Act of 1933[7]. - The company has not indicated any new or revised financial accounting standards compliance for emerging growth companies[3]. Company Information - The company is registered under the New York Stock Exchange with Class A and Class B common stock[12]. - The company’s principal executive offices are located in San Antonio, Texas[11]. - The report is signed by Bruce Lewis, the Controller of Biglari Holdings Inc.[9].

Revenue and Sales - Net sales and other revenue rose to $80,788 in Q1 2024 from $77,952 in Q1 2023[24]. - Franchise royalties and fees fell to $3,477 in Q1 2024 from $4,258 in Q1 2023, attributed to the closure of traditional franchise stores, reducing units from 143 to 125[22]. Expenses - General and administrative expenses increased to $11,730, or 18.9% of total revenue, in Q1 2024, compared to $10,463, or 17.1% in Q1 2023, primarily due to higher salaries and wages[23]. - Cost of food increased to $23,170, representing 28.7% of net sales in Q1 2024, up from $20,871, or 26.8%, in Q1 2023[24]. - Labor costs remained stable at $21,765, accounting for 26.9% of net sales in both Q1 2024 and Q1 2023[24]. Cash Flow and Investments - Cash increase in Q1 2024 was $6,470 compared to $2,146 in Q1 2023, mainly due to reduced cash used in investing and financing activities[37]. - Investment partnership pretax gains were $21,985 in Q1 2024, down from $72,588 in Q1 2023, leading to a decrease in income tax expense from $19,738 to $6,816[35]. - The available line of credit is $30,000, maturing on September 12, 2024, with no balance as of March 31, 2024[38]. Franchise Operations - Franchise partner fees decreased to $17,758 in Q1 2024 from $17,912 in Q1 2023, with food and labor expenses up by 1.8 percentage points[21]. - Estimated ultimate liabilities for prior accident years were reduced by $3,319 in Q1 2024, representing 21.9% of net liabilities, compared to $1,651 or 9.8% in Q1 2023[73].

Financial Results - Biglari Holdings Inc. announced its earnings for the fourth quarter and year ended December 31, 2023, on February 24, 2024[3] - The 2023 Annual Report to shareholders is available online, including Sardar Biglari's annual letter[12] Stock Information - The company is listed on the New York Stock Exchange under the trading symbols BH.A and BH[2]

Financial Performance - Total revenue for 2023 was $365.318 million, a slight decrease from $368.231 million in 2022 [263]. - Net earnings attributable to Biglari Holdings Inc. shareholders for 2023 were $54.948 million, compared to a loss of $32.018 million in 2022 [263]. - Restaurant operations generated revenue of $250.857 million in 2023, up from $241.568 million in 2022 [263]. - The consolidated income tax expense was $9,308 in 2023 compared to a benefit of $10,722 in 2022, with tax benefits of $5,660 associated with Abraxas Petroleum's oil and gas properties [232]. - Corporate and other net losses increased in 2023 compared to 2022, primarily due to an incentive fee of $7,271 [233]. - The company reported a gain on investment partnership of $19.440 million in 2023, recovering from a loss of $75.953 million in 2022 [263]. Cash Flow and Assets - Net cash provided by operating activities was $73,002 in 2023, down from $127,825 in 2022, while net cash used in investing activities decreased by $70,525 [237]. - The company had cash and cash equivalents of $28,066 and total cash and investments of $592,717 as of December 31, 2023 [235]. - Cash and cash equivalents decreased to $28.066 million in 2023 from $37.467 million in 2022 [262]. - Total current assets increased to $152.551 million in 2023 from $150.654 million in 2022 [262]. - Total assets rose to $849.422 million in 2023, compared to $828.474 million in 2022 [262]. - Total liabilities decreased to $250.092 million in 2023 from $272.906 million in 2022 [262]. Shareholder Information - Shareholders' equity increased to $599,330 as of December 31, 2023, an increase of $52,364 from the previous year, primarily due to net income of $54,948 [234]. - The company has never declared a dividend and had 1,551 beneficial shareholders of its Class A common stock as of February 1, 2024 [120]. Acquisitions - The company acquired the remaining 10% of Abraxas Petroleum for $5,387 in 2023, following the initial acquisition of 90% for $80,000 [102]. - The company’s financial results include the results of Abraxas Petroleum from the acquisition date to the end of the calendar year [102]. Lease Accounting - The company records right-of-use assets and corresponding lease liabilities on its consolidated balance sheets when a lease is determined to exist [267]. - Right-of-use assets are recognized at the commencement date at the value of the lease liability, adjusted for prepayments and initial direct costs [267]. - Lease liabilities are recognized based on the present value of remaining lease payments over the lease term [267]. - The company does not record lease contracts with a term of 12 months or less on its consolidated balance sheets [267]. - Fixed lease expense for operating leases is recognized on a straight-line basis over the lease term [267]. Operational Metrics - As of December 31, 2023, Biglari Holdings had 492 company-operated and franchise restaurant locations, with 17 of the 148 Steak n Shake company-operated stores closed [114]. - Goodwill remained relatively stable at $53.530 million in 2023, compared to $53.513 million in 2022 [262]. - The company maintained effective internal control over financial reporting as of December 31, 2023 [258].

Financial Performance - Net sales for Q3 2023 were $39,195, representing a 4.7% increase from Q3 2022, while net sales for the first nine months of 2023 were $115,613, a 2.0% increase compared to the same period in 2022[160] - Total revenue for Q3 2023 was $61,886, an increase from $59,437 in Q3 2022[160] - Franchise partner fees for Q3 2023 were $17,622, up from $15,880 in Q3 2022, and totaled $54,604 for the first nine months of 2023 compared to $47,929 in 2022[161] - The company reported a third-quarter income tax benefit of $17,502 in 2023, compared to an expense of $9,598 in Q3 2022[143] - Investment partnership pre-tax losses were $89,599 in Q3 2023, compared to pre-tax gains of $29,658 in Q3 2022[143] Operational Metrics - As of September 30, 2023, the company operated 510 restaurants, including both company-operated and franchise locations[135] - The company reopened four Steak n Shake stores and sold six properties during the first nine months of 2023[159] Cost and Expenses - The cost of food for Q3 2023 was $11,888, representing 30.3% of net sales, consistent with the same percentage in Q3 2022[160] - The company incurred $12,524 in total selling, general, and administrative expenses in Q3 2023, which was 20.2% of total revenue[160] Assets - The company’s total assets at fair value as of September 30, 2023, were $92,356, compared to $88,267 at the same time in 2022[149]

Restaurant Operations - As of June 30, 2023, the total number of company-operated and franchise restaurants was 521, down from 545 as of December 31, 2022, reflecting a net closure of 24 restaurants[167]. - Total revenues for restaurant operations reached $64,491 in Q2 2023, up from $60,324 in Q2 2022, with Steak n Shake contributing $61,577 and Western Sizzlin $2,914[186]. Franchise Performance - Franchise partner fees increased to $19,070 in Q2 2023 from $16,425 in Q2 2022, totaling $36,982 for the first six months of 2023 compared to $32,049 in the same period of 2022[170]. - Traditional franchise royalties and fees decreased to $4,125 in Q2 2023 from $5,237 in Q2 2022, totaling $8,383 for the first six months of 2023 compared to $10,383 in 2022, attributed to fewer traditional units open[171]. Operating Costs and Efficiency - Operating costs at company-operated restaurants were $19,295 or 48.8% of net sales in Q2 2023, down from $20,350 or 54.0% in Q2 2022, indicating improved efficiency[172]. - Marketing expenses decreased by $584 in the first six months of 2023 compared to the same period in 2022, primarily due to reduced marketing by traditional franchisees[173]. Insurance Operations - First Guard's loss ratio improved to 46.2% in Q2 2023 from 60.6% in Q2 2022, reflecting better underwriting performance despite cost inflation[179]. - The total insurance operations revenue was $17,547 in Q2 2023, compared to $16,354 in Q2 2022, indicating growth in this segment[186]. Financial Position - Total assets at fair value were $105,222, with cash equivalents of $16,563 and government bonds valued at $61,467[182]. - The company paid $4,200 in service fees to Biglari Enterprises during the first six months of 2023, consistent with the previous year[184].

Ownership and Investments - As of March 31, 2023, Biglari Holdings owns approximately 66.3% of the economic interest and 70.4% of the voting interest in the company[85] - 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[85] - The carrying value of investment partnerships increased to $230,843 as of March 31, 2023, from $155,794 as of December 31, 2022[105] - The company reported gains from investment partnerships of $72,588 in the first quarter of 2023, contributing $56,029 to net earnings[110] - Investment partnership gains for Q1 2023 were $72.588 million, a substantial increase from a loss of $6.661 million in Q1 2022[221] - Contribution to net earnings from investment partnerships was $56.029 million in Q1 2023, compared to a loss of $4.801 million in Q1 2022[221] Restaurant Operations - As of March 31, 2023, the company operated 532 restaurants, including 172 company-operated Steak n Shake stores, with 36 of these stores closed[88][90] - The company plans to refranchise the remaining closed company-operated restaurants to improve operational efficiency[88] - The number of Steak n Shake traditional units decreased to 143 as of March 31, 2023, compared to 179 units on March 31, 2022[162] - The cost of food at company-operated units was $10,448, or 28.3% of net sales, down from $10,960 or 28.7% in Q1 2022[180] - Operating costs at company-operated restaurants decreased to $18,457, or 50.0% of net sales, from $20,032 or 52.4% in Q1 2022, primarily due to lower labor costs[181] Financial Performance - Net sales for the first quarter of 2023 were $36,894 million, compared to $38,216 million in the first quarter of 2022[145] - The company recorded an income tax expense of $19,738 million for the first quarter of 2023, compared to an income tax benefit of $171 million in the first quarter of 2022[158] - General and administrative expenses for Q1 2023 were $10,463, representing 17.1% of total revenue, up from $8,650 or 14.5% in Q1 2022[163] - Earnings before income taxes improved to $122 million in Q1 2023, compared to a loss of $336 million in Q1 2022[220] - Contribution to net earnings for Q1 2023 was $91 million, a significant recovery from a loss of $251 million in Q1 2022[220] Insurance and Underwriting - Incurred loss and loss adjustment expenses for the first quarter of 2023 were $8,596 million, a decrease from $9,588 million in the first quarter of 2022, with net reductions of estimated ultimate liabilities for prior accident years at 9.8% in 2023[127] - Net underwriting gain for the first quarter of 2023 was $1,383 million, compared to $312 million in the same period of 2022, representing a significant increase[210] - Premiums earned in Q1 2023 totaled $8,899 million, slightly up from $8,731 million in Q1 2022[212] - Insurance losses decreased to $5,244 million in Q1 2023, down from $6,188 million in Q1 2022, indicating improved loss management[212] - Pre-tax underwriting gain for Q1 2023 was $1,862 million, compared to $732 million in Q1 2022, reflecting strong operational performance[212] Liquidity and Debt Management - The balance of the line of credit was $6,500 million as of March 31, 2023, down from $10,000 million on December 31, 2022, with an interest rate of 7.3%[124] - The company maintains significant liquidity, with a revolving line of credit available until September 12, 2024[229] - The company reported cash paid for finance leases of $344 million in the first quarter of 2023, down from $421 million in the same period of 2022[131] - Cash and cash equivalents as of March 31, 2023, were $39,363, an increase from $37,467 on December 31, 2022[202] Impairments and Charges - The company recorded an impairment of $776 related to underperforming restaurant assets in the first quarter of 2023[114] - The company recorded impairment charges of $776 million in Q1 2023 related to underperforming stores, with no impairments reported in Q1 2022[208] Revenue Trends - Oil and gas revenues in Q1 2023 were $4,971 million, a decrease from $9,812 million in Q1 2022, primarily due to lower commodity prices[218] - Average West Texas Intermediate price per barrel in Q1 2023 was approximately $76.11, down from $94.82 in Q1 2022, indicating market volatility[217] - Contribution to net earnings from oil and gas operations was $739 million in Q1 2023, compared to $2,924 million in Q1 2022, reflecting the impact of lower revenues[218] - Licensing and media revenues for Q1 2023 were $595 million, down from $634 million in Q1 2022, representing a decrease of approximately 6.1%[220] - Licensing and media costs decreased significantly to $452 million in Q1 2023 from $953 million in Q1 2022, a reduction of about 52.7%[220] Investment Income - Net investment income for Q1 2023 was $462 million, significantly higher than $168 million in Q1 2022, showcasing effective investment strategies[214]

Financial Performance - Net sales for 2022 were $1,819 million, an increase from $1,595 million in 2021, representing a growth of approximately 14.0%[239] - Other revenue increased to $8,853 million in 2022 from $6,000 million in 2021, primarily due to reduced gift card redemptions[240] - Total revenue for 2022 was $241,568, down from $271,290 in 2021, reflecting the overall decline in company-operated restaurant sales[292] - Contribution to net earnings for 2022 was $9,383, down from $11,235 in 2021, reflecting the overall decline in revenue[292] - Earnings before income taxes significantly increased to $24,539 million in 2022, compared to $9,713 million in 2021, marking a 153.5% rise[307] - Contribution to net earnings for 2022 was $18,593 million, up from $7,528 million in 2021, representing a 147.5% increase[307] Costs and Expenses - Cost of food in 2022 was $502 million, accounting for 27.6% of net sales, compared to $448 million or 28.1% in 2021[239] - Labor costs for 2022 were $500 million, which is 27.5% of net sales, up from $435 million or 27.3% in 2021[239] - Selling, general and administrative expenses decreased to $51,833 million in 2022, or 21.5% of total revenue, compared to $57,186 million or 21.1% in 2021[241] - The cost of food at company-operated units was $44,461, or 29.8% of net sales, compared to $55,315, or 29.4% in 2021, showing a consistent percentage despite a decrease in total cost[295] - Interest on obligations under leases decreased to $5,493 in 2022 from $6,039 in 2021, attributed to the maturity and retirement of lease obligations[297] - Asset impairments decreased by $1,115 in 2022 compared to 2021, as fewer underperforming stores were affected by the pandemic[296] Franchise Operations - As of December 31, 2022, there were 545 total company-operated and franchise restaurants, with 39 of the 177 company-operated Steak n Shake stores closed[264][265] - Franchise royalties and fees decreased to $19,678 million in 2022 from $21,736 million in 2021, due to the closure of certain traditional franchise stores[270] - Franchise partner fees increased to $63,853 in 2022 from $55,641 in 2021, with 175 franchise partner units as of December 31, 2022, compared to 159 in 2021[294] Investment and Cash Flow - Net cash provided by operating activities decreased to $127,825 million in 2022 from $228,767 million in 2021, a decline of 44.1%[315] - Net cash used in investing activities increased to $136,605 million in 2022, compared to $58,525 million in 2021, a rise of 133.4%[315] - The company acquired Abraxas Petroleum for $58,274 million in 2022, contributing to the increase in investing activities[343] - Investment partnership losses for 2022 were $(75,953), compared to gains of $10,953 in 2021, indicating a significant downturn in investment performance[287] - Investment losses were $3,393 million in 2022, compared to gains of $6,401 million in 2021, indicating significant volatility in earnings[336] Oil and Gas Operations - The average West Texas Intermediate price per barrel for 2022 was approximately $94.53, up from $68.17 in 2021, indicating a significant increase in oil prices[283] - Oil and gas revenue for 2022 was $46,091 million, a 39.5% increase from $33,004 million in 2021[307] - Oil and gas production costs rose to $13,355 million in 2022, up from $10,470 million in 2021, reflecting a 27.5% increase[307] Tax and Reserves - The consolidated income tax benefit was $10,722 million in 2022, compared to an expense of $6,789 million in 2021, primarily due to a tax benefit for investment partnership losses[339] - Proved reserves of oil and natural gas are estimated quantities that are economically producible under existing conditions, including both developed and undeveloped volumes[348] - Proved developed reserves are expected to be recovered through existing wells with current equipment and methods[348] - Proved undeveloped reserves are anticipated to be recovered from new wells on undrilled proved acreage or from existing wells requiring additional expenditure for recompletion[348] - Estimates of reserves are subject to change as new information becomes available due to inherent uncertainties and limited reservoir data[348]