Part I – Financial Information [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited consolidated financial statements reflect the acquisition of Southern Oil and the adoption of the new lease accounting standard [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew to $1.15 billion, driven by property additions and new operating lease assets Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2019 (Unaudited) | Dec 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $19,058 | $48,557 | | Investment partnerships | $561,479 | $557,480 | | Property and equipment, net | $355,489 | $274,716 | | Operating lease assets | $65,939 | $— | | **Total Assets** | **$1,153,950** | **$1,029,493** | | **Liabilities & Equity** | | | | Accounts payable and accrued expenses | $138,822 | $117,265 | | Long-term notes payable and other borrowings | $264,857 | $240,001 | | Operating lease liabilities | $59,668 | $— | | **Total Liabilities** | **$552,430** | **$459,038** | | **Total Shareholders' Equity** | **$601,520** | **$570,455** | [Consolidated Statements of Earnings](index=4&type=section&id=Consolidated%20Statements%20of%20Earnings) Net earnings for the first nine months of 2019 reached $31.8 million, driven by investment gains Statement of Earnings Summary (in thousands) | Metric | Q3 2019 | Q3 2018 | First Nine Months 2019 | First Nine Months 2018 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $160,216 | $203,582 | $510,418 | $614,546 | | Restaurant Operations Revenue | $145,111 | $195,041 | $478,947 | $589,569 | | Investment partnership gains (losses) | $1,449 | $(19,008) | $69,801 | $(23,854) | | Earnings (loss) before income taxes | $(631) | $(24,902) | $38,801 | $(35,942) | | **Net Earnings (Loss)** | **$(17)** | **$(13,703)** | **$31,775** | **$(23,056)** | | Net earnings (loss) per equivalent Class A share | $(0.05) | $(39.50) | $92.04 | $(66.12) | [Consolidated Statements of Cash Flows](index=5&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow was $39.9 million, while investing activities used $63.3 million for an acquisition Cash Flow Summary - First Nine Months (in thousands) | Activity | 2019 | 2018 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $39,859 | $(5,584) | | Net cash provided by (used in) investing activities | $(63,276) | $2,221 | | Net cash used in financing activities | $(6,003) | $(5,797) | | **Decrease in cash, cash equivalents and restricted cash** | **$(29,449)** | **$(9,223)** | [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail the Southern Oil acquisition, lease accounting changes, and a $7.4 million impairment charge - On September 9, 2019, the company acquired Southern Oil Company for **$51.5 million** in cash, marking its entry into the oil and gas exploration and production business[15](index=15&type=chunk) - The company adopted the new lease accounting standard ASC 842 on January 1, 2019, resulting in the recognition of operating lease assets of **$63.3 million** and operating lease liabilities of **$69.7 million**[26](index=26&type=chunk) - The company's investments in The Lion Fund partnerships are **highly concentrated** in the common stock of Cracker Barrel Old Country Store, Inc[42](index=42&type=chunk)[127](index=127&type=chunk) - Impairment charges of **$7.4 million** were recorded in the first nine months of 2019, primarily due to the temporary closure of 106 Steak n Shake restaurants[44](index=44&type=chunk) - The company settled the Drake v. Steak n Shake and Clendenen v. Steak n Shake class action lawsuits for **$8.35 million** regarding the classification of managerial employees[81](index=81&type=chunk) [Management's Discussion and Analysis (MD&A)](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Investment gains offset restaurant operating losses, while the Southern Oil acquisition diversifies operations - Steak n Shake's sales have declined since 2017, leading to lower profitability; to address this, the company is emphasizing a franchise partnership program and has temporarily closed **106 company-operated restaurants** as of September 30, 2019[101](index=101&type=chunk) - The significant swing from a net loss in 2018 to net earnings in 2019 is primarily due to gains from investment partnerships, which contributed **$53.9 million** to net earnings in the first nine months of 2019 compared to a loss of **$15.7 million** in the prior year period[103](index=103&type=chunk)[126](index=126&type=chunk) [Results of Operations: Restaurants](index=22&type=section&id=MD%26A%20-%20Restaurants) The restaurant segment faced a $109.4 million sales decline and a pre-tax loss of $21.3 million - Steak n Shake's same-store sales **decreased 6.4%** and customer traffic **decreased 9.7%** during the first nine months of 2019[111](index=111&type=chunk) - As of September 30, 2019, **106 Steak n Shake restaurants were temporarily closed** pending identification of a franchise partner[106](index=106&type=chunk) Restaurant Segment Earnings (in thousands) | Metric | First Nine Months 2019 | First Nine Months 2018 | | :--- | :--- | :--- | | Total Revenue | $478,947 | $589,569 | | Earnings (loss) before income taxes | $(21,343) | $59 | | Contribution to net earnings (loss) | $(14,888) | $1,914 | [Results of Operations: Insurance](index=26&type=section&id=MD%26A%20-%20Insurance) The insurance segment delivered solid growth with an 8.8% increase in premiums earned Insurance Segment Earnings (in thousands) | Metric | First Nine Months 2019 | First Nine Months 2018 | | :--- | :--- | :--- | | Premiums written | $21,302 | $19,576 | | Pre-tax underwriting gain | $4,902 | $4,029 | | Contribution to net earnings | $4,465 | $3,629 | [Results of Operations: Oil and Gas](index=27&type=section&id=MD%26A%20-%20Oil%20and%20Gas) The new oil and gas segment contributed $6.5 million in revenue in its first partial quarter Oil and Gas Segment Earnings - Q3 2019 (in thousands) | Metric | Amount | | :--- | :--- | | Oil and gas revenue | $6,500 | | Earnings before income taxes | $1,448 | | Contribution to net earnings | $1,060 | [Results of Operations: Investment Partnership Gains (Losses)](index=28&type=section&id=MD%26A%20-%20Investment%20Partnership%20Gains%20(Losses)) Investment partnerships generated $69.8 million in pre-tax gains, driving overall company profitability - The investments held by the partnerships are largely **concentrated in the common stock of Cracker Barrel Old Country Store, Inc**[127](index=127&type=chunk) Investment Partnership Contribution (in thousands) | Metric | Q3 2019 | Q3 2018 | First Nine Months 2019 | First Nine Months 2018 | | :--- | :--- | :--- | :--- | :--- | | Investment partnership gains (losses) | $1,449 | $(19,008) | $69,801 | $(23,854) | | Contribution to net earnings (loss) | $1,400 | $(12,889) | $53,891 | $(15,691) | [Financial Condition and Liquidity](index=28&type=section&id=MD%26A%20-%20Financial%20Condition%20and%20Liquidity) Shareholders' equity grew to $601.5 million, supported by strong operating cash flow - Consolidated shareholders' equity increased to **$601.5 million** at September 30, 2019, up from $570.5 million at year-end 2018, primarily due to net income of **$31.8 million**[131](index=131&type=chunk)[6](index=6&type=chunk) - Cash used in investing activities was **$63.3 million**, which included **$51.1 million** for the acquisition of Southern Oil[134](index=134&type=chunk)[135](index=135&type=chunk) - The outstanding balance on Steak n Shake's credit facility was **$182.0 million** as of September 30, 2019, with the loan maturing in March 2021[129](index=129&type=chunk)[140](index=140&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces significant market risk from its concentrated equity investments and interest rate risk - The company's primary market risk is from its **concentrated equity position** in Cracker Barrel Old Country Store, Inc, held through its investment partnerships[145](index=145&type=chunk) - A hypothetical **10% change** in investment market prices would result in a corresponding change to carrying value of **$60.5 million** and an approximate **8% change** in shareholders' equity[146](index=146&type=chunk) - A hypothetical **100 basis point increase** in short-term interest rates would reduce annual net earnings by approximately **$1.4 million** due to the variable-rate term loan[147](index=147&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes - The Chief Executive Officer and Controller concluded that the company's disclosure controls and procedures were **effective** as of the end of the period[148](index=148&type=chunk) - There were **no material changes** in internal control over financial reporting during the quarter ended September 30, 2019[149](index=149&type=chunk) Part II – Other Information [Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company is appealing a dismissed shareholder lawsuit and settled two employee class-action lawsuits - A shareholder class action lawsuit alleging breach of fiduciary duty related to the company's dual-class stock structure was dismissed by the Superior Court but is **currently under appeal**[78](index=78&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk) - The company settled two purported class action lawsuits (Drake v. Steak n Shake and Clendenen v. Steak n Shake) for **$8.35 million**[81](index=81&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors were reported during the quarter - **No material changes** to risk factors were reported for the quarter[150](index=150&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds - No unregistered sales of equity securities or use of proceeds occurred during the period[150](index=150&type=chunk)

Financial Performance - As of June 30, 2019, Biglari Holdings reported net sales of $152,062 for the second quarter, a decrease of $39,735 compared to $191,797 in the same quarter of 2018[108]. - The company reported a net loss of $1,424 attributable to shareholders for the second quarter of 2019, compared to earnings of $1,640 in the same quarter of 2018[106]. - Corporate net losses in Q2 2019 were $2,170 million, improved from net losses of $3,450 million in Q2 2018[125]. - Contribution to net earnings for the first six months of 2019 was $2,675 million, an increase from $2,204 million in the first six months of 2018[114]. Sales and Customer Traffic - Steak n Shake's same-store sales decreased by 5.9% and customer traffic decreased by 9.2% during the second quarter of 2019[108]. - A total of 103 Steak n Shake restaurants were temporarily closed as of June 30, 2019, while the company is actively seeking franchise partners for these locations[101]. Costs and Expenses - The cost of food for the second quarter of 2019 was $47,316, representing 31.1% of net sales, an increase from 29.8% in the same quarter of 2018[110]. - Restaurant operating costs for the second quarter of 2019 were $80,483, or 52.9% of net sales, compared to 51.5% in the second quarter of 2018[111]. - General and administrative expenses decreased to $12,021, or 7.5% of total revenues, from $16,877, or 8.4% in the same quarter of 2018[112]. Investment Performance - Investment partnership gains for the second quarter were $26,254, a significant increase from losses of $5,877 in the same quarter of 2018[103]. - Investment partnership gains for Q2 2019 were $34,198 million, compared to a loss of $8,341 million in Q2 2018[120]. - Total other income for the first six months of 2019 was $626 million, compared to $379 million in the same period of 2018[114]. Cash and Debt Management - Consolidated cash and investments totaled $836,124 million as of June 30, 2019, an increase from $801,982 million at the end of 2018[128]. - Cash used in operating activities during the first six months of 2019 was $8,295 million, compared to $465 million in the same period of 2018[129]. - The outstanding balance on Steak n Shake's credit facility was $182,598 million as of June 30, 2019[124]. Market and Investment Risks - The company holds a concentrated position in the common stock of Cracker Barrel Old Country Store, Inc., which may lead to significant net losses if there is a decline in the general stock market[140]. - A hypothetical 10% increase or decrease in the market price of investments would result in a respective change in the carrying value of investments of $66,354, affecting shareholders' equity by approximately 8%[141]. - A hypothetical 100 basis point increase in short-term interest rates would impact net earnings by approximately $1,400[142]. - Decreases in the values of equity investments can materially adversely affect earnings and consolidated shareholders' equity[140]. Strategic Goals - Biglari Holdings aims to maximize per-share intrinsic value through strategic decisions made by Chairman and CEO Sardar Biglari[99]. - The company prefers to hold equity investments for long periods, minimizing concerns over short-term price volatility[141]. - The interests in investment partnerships are committed on a rolling 5-year basis, with distributions upon withdrawal paid out over two years[141]. - The company has had minimal exposure to foreign currency exchange rate fluctuations in the first six months of 2019 and 2018[142].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 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) INDIANA 82-3784946 (State or other jurisdiction ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 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) INDIANA 82-3784946 (State or other jurisdiction of ...