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 ~~September 30, 2021~~March 31, 2022


☐			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 incorporation)						(I.R.S. Employer Identification No.)


17802 IH 10 West,	Suite 400
San Antonio,	TX	78257
(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 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 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 filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller 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 ~~November 2, 2021:~~May 3, 2022:


Class A common stock –			206,864
Class B common stock –			2,068,640

Table of Contents

BIGLARI HOLDINGS INC.

INDEX


		Page No.
Part I – Financial Information

Item 1.	Financial Statements	1
	Consolidated Balance Sheets — ~~September~~March ~~30, 2021~~3 1 , 202 2 and December 31, ~~2020~~202 1	1
	Consolidated Statements of Earnings — ~~Third~~First Quarter 202 2 and ~~First~~ 202 ~~Nine~~1 ~~Months 2021 and 2020~~	2
	Consolidated Statements of Comprehensive Income — ~~Third~~First Quarter ~~and First~~202 2 and 202 ~~Nine~~ 1 ~~Months 2021 and 2020~~	2
	Consolidated Statements of Cash Flows — First ~~Nine~~Quarter ~~Months 2021~~202 2 and ~~2020~~20 21	3
	Consolidated Statements of Changes in Shareholders’ Equity — First ~~Nine~~Quarter ~~Months 2021~~202 2 and ~~2020~~202 1	4
	Notes to Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1718
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	25
Item 4.	Controls and Procedures	2625

Part II – Other Information

Item 1.	Legal Proceedings	2625
Item 1A.	Risk Factors	2625
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	2726
Item 4.	Mine Safety Disclosures	2726
Item 5.	Other Information	2726
Item 6.	Exhibits	2726
Signatures		2827

Table of Contents

PART 1 – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BIGLARI HOLDINGS INC.

CONSOLIDATED BALANCE SHEETS

(dollars in thousands)


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(Unaudited)					(Unaudited)
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	27,795	$	24,503	Cash and cash equivalents	$	45,777	$	42,349
Investments	Investments	99,006		94,861		Investments	87,150		83,061
Receivables	Receivables	23,885		19,185		Receivables	22,427		28,508
Inventories	Inventories	3,102		2,737		Inventories	4,376		3,803
Other current assets	Other current assets	6,763		6,492		Other current assets	8,067		7,088
Total current assets	Total current assets	160,551		147,778		Total current assets	167,797		164,809
Property and equipment	Property and equipment	352,822		316,122		Property and equipment	347,609		349,351
Operating lease assets	Operating lease assets	44,598		42,832		Operating lease assets	40,540		42,538
Goodwill and other intangible assets	Goodwill and other intangible assets	77,179		77,661		Goodwill and other intangible assets	76,854		77,010
Investment partnerships	Investment partnerships	273,089		419,550		Investment partnerships	242,368		250,399
Other assets	Other assets	11,132		14,025		Other assets	10,686		10,700
Total assets	Total assets	$	919,371	$	1,017,968	Total assets	$	885,854	$	894,807

Liabilities and shareholders’ equity	Liabilities and shareholders’ equity					Liabilities and shareholders’ equity
Liabilities	Liabilities					Liabilities
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable and accrued expenses	Accounts payable and accrued expenses	$	100,898	$	90,892	Accounts payable and accrued expenses	$	99,761	$	100,467
Loss and loss adjustment expenses	Loss and loss adjustment expenses	13,401		14,652		Loss and loss adjustment expenses	14,443		14,609
Unearned premiums	Unearned premiums	11,303		13,277		Unearned premiums	11,875		11,667
Current portion of lease obligations	Current portion of lease obligations	17,230		17,365		Current portion of lease obligations	17,057		16,898
Current portion of notes payable		—		152,261
Total current liabilities	Total current liabilities	142,832		288,447		Total current liabilities	143,136		143,641
Lease obligations	Lease obligations	107,949		111,645		Lease obligations	101,156		104,479
Deferred taxes	Deferred taxes	57,910		41,346		Deferred taxes	41,763		46,533
Asset retirement obligations	Asset retirement obligations	10,314		10,022		Asset retirement obligations	10,520		10,389
Other liabilities	Other liabilities	1,800		1,680		Other liabilities	1,982		2,069
Total liabilities	Total liabilities	320,805		453,140		Total liabilities	298,557		307,111

Shareholders’ equity	Shareholders’ equity					Shareholders’ equity
Common stock	Common stock	1,138		1,138		Common stock	1,138		1,138
Additional paid-in capital	Additional paid-in capital	381,788		381,788		Additional paid-in capital	381,788		381,788
Retained earnings	Retained earnings	613,351		573,050		Retained earnings	608,230		608,528
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(1,909)		(1,531)		Accumulated other comprehensive loss	(2,138)		(1,907)
Treasury stock, at cost	Treasury stock, at cost	(395,802)		(389,617)		Treasury stock, at cost	(401,721)		(401,851)
Biglari Holdings Inc. shareholders’ equity	Biglari Holdings Inc. shareholders’ equity	598,566		564,828		Biglari Holdings Inc. shareholders’ equity	587,297		587,696
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	919,371	$	1,017,968	Total liabilities and shareholders’ equity	$	885,854	$	894,807

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

BIGLARI HOLDINGS INC.

CONSOLIDATED STATEMENTS OF EARNINGS

(dollars in thousands except per share amounts)


		Third Quarter				First Nine Months					First Quarter
		2021		2020		2021		2020			2022		2021
		(Unaudited)				(Unaudited)					(Unaudited)
Revenues	Revenues									Revenues
Restaurant operations	Restaurant operations	$	59,144	$	79,674	$	196,424	$	272,582	Restaurant operations	$	59,847	$	69,954
Insurance premiums and other	Insurance premiums and other	14,723		14,413		43,729		38,692		Insurance premiums and other	15,079		14,619
Oil and gas	Oil and gas	7,353		6,029		24,310		19,554		Oil and gas	9,812		8,592
Media and licensing		863		1,719		2,695		3,209
Licensing and media										Licensing and media	634		1,123
		82,083		101,835		267,158		334,037			85,372		94,288
Cost and expenses	Cost and expenses									Cost and expenses
Restaurant cost of sales	Restaurant cost of sales	41,694		54,062		129,297		194,737		Restaurant cost of sales	35,352		45,616
Insurance losses and underwriting expenses	Insurance losses and underwriting expenses	10,672		11,290		31,733		28,866		Insurance losses and underwriting expenses	13,774		11,146
Oil and gas production costs	Oil and gas production costs	2,050		2,171		6,957		6,570		Oil and gas production costs	3,819		2,413
Media and licensing costs		880		548		1,749		1,491
Licensing and media costs										Licensing and media costs	953		480
Selling, general and administrative	Selling, general and administrative	16,889		19,902		50,848		54,974		Selling, general and administrative	16,224		15,540
Impairments	Impairments	—		3,698		559		21,817		Impairments	—		298
Depreciation and amortization		7,682		7,275		22,239		24,284
Interest expense on leases		1,462		1,593		4,619		4,679
Interest expense on notes payable		—		2,150		1,121		6,973
Depreciation, depletion, and amortization										Depreciation, depletion, and amortization	7,871		7,178
Interest expense										Interest expense	1,412		2,741
		81,329		102,689		249,122		344,391			79,405		85,412
Other income	Other income									Other income
Investment gains	Investment gains	4,534		354		6,465		1,863		Investment gains	225		3,081
Investment partnership gains (losses)	Investment partnership gains (losses)	(20,231)		27,218		27,344		(89,276)		Investment partnership gains (losses)	(6,661)		81,766
		(15,697)		27,572		33,809		(87,413)
Total other income (expenses)										Total other income (expenses)	(6,436)		84,847
Earnings (loss) before income taxes	Earnings (loss) before income taxes	(14,943)		26,718		51,845		(97,767)		Earnings (loss) before income taxes	(469)		93,723
Income tax expense (benefit)	Income tax expense (benefit)	(4,274)		5,617		11,544		(23,449)		Income tax expense (benefit)	(171)		22,016
Net earnings (loss)	Net earnings (loss)	$	(10,669)	$	21,101	$	40,301	$	(74,318)	Net earnings (loss)	$	(298)	$	71,707
Earnings per share

Net earnings (loss) per equivalent Class A share *	Net earnings (loss) per equivalent Class A share *	$	(33.74)	$	60.07	$	125.79	$	(213.31)	Net earnings (loss) per equivalent Class A share *	$	(0.98)	$	223.29

*Net earnings (loss) per equivalent Class B share outstanding are one-fifth of the equivalent Class A share or ~~$(6.75) and $25.16~~$(0.20) for the ~~third~~first quarter of 2022 and ~~first nine months of 2021, respectively, and $12.01 and $(42.66)~~$44.66 for the ~~third~~first quarter ~~and first nine months~~ of ~~2020, respectively.~~2021.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(dollars in thousands)


		Third Quarter				First Nine Months					First Quarter
		2021		2020		2021		2020			2022		2021
		(Unaudited)				(Unaudited)					(Unaudited)
Net earnings (loss)	Net earnings (loss)	$	(10,669)	$	21,101	$	40,301	$	(74,318)	Net earnings (loss)	$	(298)	$	71,707
Foreign currency translation	Foreign currency translation	(49)		344		(378)		834		Foreign currency translation	(231)		(444)
Total comprehensive income (loss)	Total comprehensive income (loss)	$	(10,718)	$	21,445	$	39,923	$	(73,484)	Total comprehensive income (loss)	$	(529)	$	71,263

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

BIGLARI HOLDINGS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)


		First Nine Months					First Quarter
		2021		2020			2022		2021
		(Unaudited)					(Unaudited)
Operating activities	Operating activities					Operating activities
Net earnings (loss)	Net earnings (loss)	$	40,301	$	(74,318)	Net earnings (loss)	$	(298)	$	71,707
Adjustments to reconcile net earnings (loss) to operating cash flows:	Adjustments to reconcile net earnings (loss) to operating cash flows:					Adjustments to reconcile net earnings (loss) to operating cash flows:
Depreciation and amortization		22,239		24,284
Depreciation, depletion, and amortization						Depreciation, depletion, and amortization	7,871		7,178
Provision for deferred income taxes	Provision for deferred income taxes	16,625		(23,755)		Provision for deferred income taxes	(4,750)		23,350
Asset impairments and other non-cash expenses	Asset impairments and other non-cash expenses	696		22,545		Asset impairments and other non-cash expenses	—		435
Gains on disposal of assets	Gains on disposal of assets	(306)		(1,251)		Gains on disposal of assets	(133)		(958)
Investment gains and investment partnership gains/losses		(34,461)		87,413
Investment and investment partnership (gains) losses						Investment and investment partnership (gains) losses	6,436		(85,013)
Distributions from investment partnerships	Distributions from investment partnerships	172,420		97,330		Distributions from investment partnerships	4,500		150,570
Changes in receivables, inventories and other assets	Changes in receivables, inventories and other assets	3,608		10,919		Changes in receivables, inventories and other assets	4,633		1,924
Changes in accounts payable and accrued expenses	Changes in accounts payable and accrued expenses	(9,877)		(36,800)		Changes in accounts payable and accrued expenses	2,833		(3,895)
Net cash provided by operating activities	Net cash provided by operating activities	211,245		106,367		Net cash provided by operating activities	21,092		165,298
Investing activities	Investing activities					Investing activities
Capital expenditures	Capital expenditures	(46,486)		(13,297)		Capital expenditures	(9,293)		(7,447)
Proceeds from property and equipment disposals	Proceeds from property and equipment disposals	2,749		3,914		Proceeds from property and equipment disposals	109		2,749
Acquisition of business, net of cash acquired		—		(34,240)
Purchases of limited partner interests	Purchases of limited partner interests	(4,800)		(69,330)		Purchases of limited partner interests	(3,000)		(3,000)
Purchases of investments	Purchases of investments	(81,923)		(240,351)		Purchases of investments	(50,086)		(16,724)
Redemptions of fixed maturity securities		74,678		241,223
Sales of investments and redemptions of fixed maturity securities						Sales of investments and redemptions of fixed maturity securities	46,193		15,642
Net cash used in investing activities	Net cash used in investing activities	(55,782)		(112,081)		Net cash used in investing activities	(16,077)		(8,780)
Financing activities	Financing activities					Financing activities
Proceeds from revolving credit facility		—		500
Principal payments on long-term debt	Principal payments on long-term debt	(149,952)		(22,729)		Principal payments on long-term debt	—		(149,952)
Principal payments on direct financing lease obligations	Principal payments on direct financing lease obligations	(4,634)		(4,152)		Principal payments on direct financing lease obligations	(1,564)		(2,609)
Net cash used in financing activities	Net cash used in financing activities	(154,586)		(26,381)		Net cash used in financing activities	(1,564)		(152,561)
Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	(85)		(13)		Effect of exchange rate changes on cash	(23)		(22)
Increase (decrease) in cash, cash equivalents and restricted cash		792		(32,108)
Increase in cash, cash equivalents and restricted cash						Increase in cash, cash equivalents and restricted cash	3,428		3,935
Cash, cash equivalents and restricted cash at beginning of year	Cash, cash equivalents and restricted cash at beginning of year	29,666		70,696		Cash, cash equivalents and restricted cash at beginning of year	43,687		29,666
Cash, cash equivalents and restricted cash at end of third quarter		$	30,458	$	38,588
Cash, cash equivalents and restricted cash at end of first quarter						Cash, cash equivalents and restricted cash at end of first quarter	$	47,115	$	33,601


		First Nine Months					First Quarter
		2021		2020			2022		2021
		(Unaudited)					(Unaudited)
Cash and cash equivalents	Cash and cash equivalents	$	27,795	$	33,164	Cash and cash equivalents	$	45,777	$	28,438
Restricted cash in other long-term assets	Restricted cash in other long-term assets	2,663		5,424		Restricted cash in other long-term assets	1,338		5,163
Cash, cash equivalents and restricted cash at end of third quarter		$	30,458	$	38,588
Cash, cash equivalents and restricted cash at end of first quarter						Cash, cash equivalents and restricted cash at end of first quarter	$	47,115	$	33,601

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

BIGLARI HOLDINGS INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

(dollars in thousands)


		Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total			Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total
Balance at December 31, 2020		$	1,138	$	381,788	$	573,050	$	(1,531)	$	(389,617)	$	564,828
Net earnings						71,707						71,707
Other comprehensive loss								(444)				(444)
Adjustment to treasury stock for holdings in investment partnerships										3,049		3,049
Balance at March 31, 2021		$	1,138	$	381,788	$	644,757	$	(1,975)	$	(386,568)	$	639,140
Net earnings (loss)						(20,737)						(20,737)
Other comprehensive income								115				115
Adjustment to treasury stock for holdings in investment partnerships										(5,026)		(5,026)
Balance at June 30, 2021		$	1,138	$	381,788	$	624,020	$	(1,860)	$	(391,594)	$	613,492
Balance at December 31, 2021														Balance at December 31, 2021	$	1,138	$	381,788	$	608,528	$	(1,907)	$	(401,851)	$	587,696
Net earnings (loss)	Net earnings (loss)					(10,669)						(10,669)		Net earnings (loss)					(298)						(298)
Other comprehensive loss	Other comprehensive loss							(49)				(49)		Other comprehensive loss							(231)				(231)
Adjustment to treasury stock for holdings in investment partnerships	Adjustment to treasury stock for holdings in investment partnerships									(4,208)		(4,208)		Adjustment to treasury stock for holdings in investment partnerships									130		130
Balance at September 30, 2021		$	1,138	$	381,788	$	613,351	$	(1,909)	$	(395,802)	$	598,566
Balance at March 31, 2022														Balance at March 31, 2022	$	1,138	$	381,788	$	608,230	$	(2,138)	$	(401,721)	$	587,297

Common
Stock Additional
Paid-In
Capital Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss) Treasury
Stock Total
Balance at December 31, 2019 $ 1,138 $ 381,788 $ 611,039 $ (2,810) $ (374,857) $ 616,298
Net earnings (loss) (137,885) (137,885)
Other comprehensive loss (312) (312)
Adjustment to treasury stock for holdings in investment partnerships 1,089 1,089
Balance at March 31, 2020 $ 1,138 $ 381,788 $ 473,154 $ (3,122) $ (373,768) $ 479,190
Net earnings 42,466 42,466
Other comprehensive income 802 802
Adjustment to treasury stock for holdings in investment partnerships 92 92
Balance at June 30, 2020 $ 1,138 $ 381,788 $ 515,620 $ (2,320) $ (373,676) $ 522,550
Net earnings (loss) 21,101 21,101
Other comprehensive income 344 344
Adjustment to treasury stock for holdings in investment partnerships (5,777) (5,777)
Balance at September 30, 2020 $ 1,138 $ 381,788 $ 536,721 $ (1,976) $ (379,453) $ 538,218


	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total
Balance at December 31, 2020	$	1,138	$	381,788	$	573,050	$	(1,531)	$	(389,617)	$	564,828
Net earnings (loss)					71,707						71,707
Other comprehensive loss							(444)				(444)
Adjustment to treasury stock for holdings in investment partnerships									3,049		3,049
Balance at March 31, 2021	$	1,138	$	381,788	$	644,757	$	(1,975)	$	(386,568)	$	639,140

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

BIGLARI HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~September 30, 2021~~March 31, 2022

(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 entire fiscal year. The financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Biglari Holdings is a holding company owning subsidiaries engaged in a number of diverse business activities, including property and casualty insurance, ~~media~~licensing and ~~licensing,~~media, restaurants, and oil and gas. The Company’s largest operating subsidiaries are involved in the franchising and operating of restaurants. Biglari Holdings ~~was~~is founded and is led by Sardar Biglari, Chairman and Chief Executive Officer of the Company. ~~The Company’s long-term objective is to maximize per-share intrinsic value.~~

Biglari Holdings’ management system combines decentralized operations with centralized finance 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 ~~September 30, 2021,~~March 31, 2022, Mr. Biglari beneficially owns shares of the Company that represent approximately ~~65.0%~~66.3% of the economic interest and ~~70.3%~~approximately 70.4% of the voting interest.

~~Overview of the Impact of COVID-19~~

The novel coronavirus (“COVID-19”) was declared a pandemic by the World Health Organization in March of 2020. Government and private sector responses to contain its spread began to affect our operating businesses significantly that same month. The COVID-19 pandemic has adversely affected nearly all of our operations, although the effects are varying significantly. The risks and uncertainties resulting from the pandemic may continue to affect our future earnings, cash flows and financial condition. The extent of such effects over the long term cannot be reasonably estimated at this time.

~~Business Acquisition~~

On March 9, 2020, Biglari Holdings acquired the stock of Southern Pioneer Property & Casualty Insurance Company, and its agency, Southern Pioneer Insurance Agency, Inc. (collectively “Southern Pioneer”). Southern Pioneer underwrites garage liability insurance, commercial property, as well as homeowners and dwelling fire insurance. The financial results for Southern Pioneer are included from the date of acquisition.

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, and Southern Oil Company. Intercompany accounts and transactions have been eliminated in consolidation.

~~Change in Presentation~~

Gain on debt extinguishment of $0 and $5,713 during the third quarter and first nine months of 2020, respectively, have been reclassified from other income to selling, general and administrative expenses. Loss and loss adjustment expenses and unearned premiums are reflected separately from accrued expenses on the consolidated balance sheet.

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, 2022 and December 31, 2021.


	March 31, 2022		December 31, 2021
	Class A	Class B	Class A	Class B
Common stock authorized	500,000	10,000,000	500,000	10,000,000
Common stock issued and outstanding	206,864	2,068,640	206,864	2,068,640

Table of Contents

Note 2. Earnings Per Share (continued)

~~The following table presents shares authorized, issued and outstanding on September 30, 2021 and December 31, 2020.~~

September 30, 2021 December 31, 2020
Class A Class B Class A Class B
Common stock authorized 500,000 10,000,000 500,000 10,000,000
Common stock issued and outstanding 206,864 2,068,640 206,864 2,068,640

~~On an equivalent Class A common stock basis, there were 620,592 shares outstanding as of September 30, 2021 and December 31, 2020.~~ The Company has applied the ~~"two-class method"~~“two-class method” of computing earnings per share as prescribed in Accounting Standards Codification ~~("ASC"~~(“ASC”) 260, ~~"Earnings~~“Earnings Per ~~Share"~~Share”. The equivalent Class A common stock applied for computing earnings per share excludes the proportional shares of Biglari ~~Holdings'~~Holdings’ stock held by the investment partnerships. ~~The~~In the tabulation below is the equivalent Class A common stock for ~~the~~ earnings per share calculation during the third quarters of 2021 and 2020 was 316,236 and 351,288, respectively. The equivalent Class A common stock for the earnings per share calculation during the first nine months of 2021 and 2020 was 320,377 and 348,396, respectively.share. There are no dilutive securities outstanding.


	March 31, 2022	March 31, 2021
Equivalent Class A common stock outstanding	620,592	620,592
Proportional ownership of Company stock held by investment partnerships	316,020	299,453
Equivalent Class A common stock for earnings per share	304,572	321,139

Note 3. Investments

Investments net of deferred taxes is presented below.

~~Investments were $99,006 and $94,861 as of September 30, 2021 and December 31, 2020, respectively.~~


	March 31, 2022		December 31, 2021
Investments	$	87,150	$	83,061
Deferred tax liability related to investments	(607)		(845)
Investments net of deferred taxes	$	86,543	$	82,216

We classify investments in fixed maturity securities at the acquisition date as either available-for-sale or held-to-maturity and re-evaluate the classification at each balance sheet date. Securities classified as held-to-maturity are carried at amortized cost, reflecting the ability and intent to hold the securities to maturity. Realized gains and losses on disposals of investments are determined on a specific identification basis. Dividends 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.~~result. However, we consider investment gains and losses, whether realized or unrealized, as non-operating.

Investment gains for the ~~third~~first quarter of 2022 and ~~first nine months of~~ 2021 were ~~$4,534~~$225 and $6,465, respectively, which include a $5,047 gain on the sale of real estate. The Company purchased 26 acres of land in Murfreesboro, Tennessee in 2014 for $2,145 and sold it in the third quarter of 2021. Investment gains for the third quarter and first nine months of 2020 were $354 and $1,863,$3,081, 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 ~~they~~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. ~~(“Biglari Capital”)~~ is the general partner of the investment partnerships and is an entity solely owned by Mr. Biglari.

The fair value and adjustment for Company common stock held by the investment partnerships to determine the carrying value of our partnership interest isare presented below.

Fair Value Company
Common Stock Carrying Value
Partnership interest at December 31, 2020 $ 590,926 $ 171,376 $ 419,550
Investment partnership gains (losses) 110,690 83,346 27,344
Distributions (net of contributions) (167,620) 0 (167,620)
Increase in proportionate share of Company stock held 0 6,185 (6,185)
Partnership interest at September 30, 2021 $ 533,996 $ 260,907 $ 273,089


	Fair Value		Company Common Stock		Carrying Value
Partnership interest at December 31, 2021	$	474,201	$	223,802	$	250,399
Investment partnership gains (losses)	(909)		5,752		(6,661)
Distributions (net of contributions)	(1,500)		0		(1,500)
Changes in proportionate share of Company stock held	0		(130)		130
Partnership interest at March 31, 2022	$	471,792	$	229,424	$	242,368

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Note 4. Investment Partnerships (continued)

Fair Value Company
Common Stock Carrying Value
Partnership interest at December 31, 2019 $ 666,123 $ 160,581 $ 505,542
Investment partnership gains (losses) (123,524) (34,248) (89,276)
Distributions (net of contributions) (28,000) 0 (28,000)
Decrease in proportionate share of Company stock held 0 4,596 (4,596)
Partnership interest at September 30, 2020 $ 514,599 $ 130,929 $ 383,670


	Fair Value		Company Common Stock		Carrying Value
Partnership interest at December 31, 2020	$	590,926	$	171,376	$	419,550
Investment partnership gains (losses)	110,918		29,152		81,766
Distributions (net of contributions)	(147,570)		0		(147,570)
Changes in proportionate share of Company stock held			(3,049)		3,049
Partnership interest at March 31, 2021	$	554,274	$	197,479	$	356,795

The carrying value of the investment partnerships net of deferred taxes is presented below.


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Carrying value of investment partnerships	Carrying value of investment partnerships	$	273,089	$	419,550	Carrying value of investment partnerships	$	242,368	$	250,399
Deferred tax liability related to investment partnerships	Deferred tax liability related to investment partnerships	(54,432)		(44,805)		Deferred tax liability related to investment partnerships	(39,516)		(44,532)
Carrying value of investment partnerships net of deferred taxes	Carrying value of investment partnerships net of deferred taxes	$	218,657	$	374,745	Carrying value of investment partnerships net of deferred taxes	$	202,852	$	205,867

The Company’s proportionate share of Company stock held by investment partnerships at cost ~~is $395,802~~was $401,721 and ~~$389,617~~$401,851 at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively, and iswas recorded as treasury stock.

The carrying value of the partnership interest approximates fair value adjusted by the value of held Company stock. Fair value of our partnership ~~interests~~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.


		Third Quarter				First Nine Months					First Quarter
		2021		2020		2021		2020			2022		2021
Gains (losses) on investment partnership		$	(20,231)	$	27,218	$	27,344	$	(89,276)
Gains (losses) from investment partnerships										Gains (losses) from investment partnerships	$	(6,661)	$	81,766
Tax expense (benefit)	Tax expense (benefit)	(4,946)		6,163		6,175		(21,337)		Tax expense (benefit)	(1,860)		19,117
Contribution to net earnings	Contribution to net earnings	$	(15,285)	$	21,055	$	21,169	$	(67,939)	Contribution to net earnings	$	(4,801)	$	62,649

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 ~~consolidated~~ financial statements.

There were no incentive reallocations from Biglari Holdings to Biglari Capital Corp. during the first ~~nine months~~quarters of ~~2021~~2022 and ~~2020.~~

2021.

Table of Contents

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 Fund Lion Fund II
Total assets as of September 30, 2021 $ 132,351 $ 583,989
Total liabilities as of September 30, 2021 $ 1,490 $ 101,956
Revenue for the first nine months of 2021 $ 35,639 $ 94,078
Earnings for the first nine months of 2021 $ 35,584 $ 93,548
Biglari Holdings' ownership interest as of September 30, 2021 62.4 % 93.9 %
Total assets as of December 31, 2020 $ 112,970 $ 566,663
Total liabilities as of December 31, 2020 $ 189 $ 25,453
Revenue for the first nine months of 2020 $ (18,941) $ (119,644)
Earnings for the first nine months of 2020 $ (18,992) $ (120,849)
Biglari Holdings' ownership interest as of September 30, 2020 66.2 % 95.3 %


	Equity in Investment Partnerships
	Lion Fund			Lion Fund II
Total assets as of March 31, 2022	$	123,634		$	533,454
Total liabilities as of March 31, 2022	$	20,162		$	101,230
Revenue for the first quarter of 2022	$	969		$	(1,249)
Earnings for the first quarter of 2022	$	926		$	(1,581)
Biglari Holdings’ ownership interest as of March 31, 2022	62.5		%	93.9		%

Total assets as of December 31, 2021	$	114,749		$	564,022
Total liabilities as of December 31, 2021	$	7,763		$	130,417
Revenue for the first quarter of 2021	$	18,016		$	105,347
Earnings for the first quarter of 2021	$	17,998		$	105,274
Biglari Holdings’ ownership interest as of March 31, 2021	61.3		%	94.0		%

Revenue in the ~~above summarized~~ 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.


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Land	Land	$	144,774	$	142,601	Land	$	144,605	$	144,605
Buildings	Buildings	147,947		138,734		Buildings	149,162		148,605
Land and leasehold improvements	Land and leasehold improvements	148,296		141,351		Land and leasehold improvements	147,355		147,349
Equipment	Equipment	223,815		192,735		Equipment	225,955		224,581
Oil and gas properties	Oil and gas properties	73,752		75,900		Oil and gas properties	74,150		74,147
Construction in progress	Construction in progress	2,482		1,032		Construction in progress	4,180		2,815
		741,066		692,353			745,407		742,102
Less accumulated depreciation and amortization		(388,244)		(376,231)
Less accumulated depreciation, depletion, and amortization						Less accumulated depreciation, depletion, and amortization	(397,798)		(392,751)
Property and equipment, net	Property and equipment, net	$	352,822	$	316,122	Property and equipment, net	$	347,609	$	349,351

Depletion expense related to oil and gas properties was ~~$5,875~~$1,380 and ~~$9,249~~$2,244 during the first ~~nine months~~quarter of 2022 and 2021, ~~and 2020, respectively, and is included in depreciation and amortization within the consolidated statement of earnings.~~respectively.

~~During the first nine months of 2021, the Company recorded impairment charges of $559 related to closed stores.~~ The Company recorded an impairment ~~charges~~to restaurant long-lived assets of ~~$18,117~~$298 in the first ~~nine months~~quarter of ~~2020.~~2021 related to underperforming stores. The fair value of the long-lived assets was determined based on Level 3 inputs using a discounted cash flow model and quoted prices for the properties. There were no impairments in 2022.

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.

Table of Contents

Note 6. Goodwill and Other Intangible Assets (continued)

A reconciliation of the change in the carrying value of goodwill is as follows.


	Goodwill
Goodwill at December 31, ~~2020~~2021	$	~~53,596~~53,547
Change in foreign exchange rates during the first ~~nine months~~quarter of ~~2021~~2022	~~(36)~~(12)
Goodwill at ~~September 30, 2021~~March 31, 2022	$	~~53,560~~53,535

We evaluate goodwill and any indefinite-lived intangible assets for impairment annually, or more frequently if circumstances indicate impairment may have occurred. Goodwill impairment occurs when the estimated fair value of goodwill is less than its carrying value. GAAP allows entities testing for impairment the option of performing a qualitative assessment before calculating the fair value of a reporting unit for the goodwill impairment test. We use both qualitative and quantitative assessments. The valuation methodology and underlying financial information included in our quantitative determination of fair value require significant management judgments. We use both market and income approaches to derive fair ~~value.~~value of reporting units utilizing a quantitative assessment. The judgments in these two approaches include, but are not limited to, comparable market multiples, long-term projections of future financial performance, and the selection of appropriate discount rates used to determine the present value of future cash flows. Changes in such estimates or the application of alternative assumptions could produce significantly different results. In response to the adverse effects of the COVID-19 pandemic, during 2020 we considered whether goodwill needed to be evaluated for impairment for certain restaurant reporting units. We considered the available facts and made qualitative assessments and judgments for what we believed represented reasonably possible outcomes. No impairment ~~charges for goodwill were~~was recorded in the first ~~nine months~~quarter of ~~2021~~2022 or ~~2020.~~

2021. Western Sizzlin has experienced a decline in its franchised units for several years. If Western ~~Sizzlin's~~Sizzlin’s franchised units continue to decline, an impairment of its goodwill may be necessary.

Other Intangible Assets

Intangible assets with indefinite lives are composed of the following.

Trade Names Lease Rights Total
Balance at December 31, 2020 $ 15,876 $ 8,189 $ 24,065
Change in foreign exchange rates during the first nine months of 2021 — (446) (446)
Balance at September 30, 2021 $ 15,876 $ 7,743 $ 23,619


	Trade Names		Lease Rights		Total
Balance at December 31, 2021	$	15,876	$	7,587	$	23,463
Change in foreign exchange rates during the first quarter of 2022	—		(144)		(144)
Balance at March 31, 2022	$	15,876	$	7,443	$	23,319

~~During the first nine months~~Intangible assets with indefinite lives consist of ~~2020, the Company recorded impairment charges of $3,700 on~~trade names and lease ~~rights related to our international restaurant operations.~~

rights. Fair values were determined using Level 3 inputs and available market data.

Note 7. Restaurant Operations Revenues

Restaurant operations revenues were as follows.


		Third Quarter				First Nine Months					First Quarter
		2021		2020		2021		2020			2022		2021
Net sales	Net sales	$	41,916	$	67,617	$	146,269	$	241,832	Net sales	$	38,216	$	54,950
Franchise partner fees	Franchise partner fees	11,508		6,894		31,744		14,775		Franchise partner fees	15,624		7,853
Franchise royalties and fees	Franchise royalties and fees	4,865		4,421		14,594		13,704		Franchise royalties and fees	5,146		5,135
Other	Other	855		742		3,817		2,271		Other	861		2,016
		$	59,144	$	79,674	$	196,424	$	272,582		$	59,847	$	69,954

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.

~~Table of Contents~~

~~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 10 thousand dollars is recognized when the operator becomes a franchise partner. The Company recognizes franchise partner fees monthly as underlying restaurant sales occur.

Table of Contents

Note 7. Restaurant Operations Revenues (continued)

The Company leases or subleases property and equipment to ~~franchisees~~franchise partners under lease arrangements. Both real estate and equipment rental payments are charged to ~~franchisees~~franchise partners and are recognized in accordance with ASC 842, ~~"Leases"~~“Leases”. During the ~~third~~first quarter of ~~2021~~2022 and ~~2020,~~2021, restaurant operations recognized ~~$4,277~~$4,774 and ~~$1,606,~~$2,900, respectively, in franchise partner fees related to rental ~~fees. During the nine months ended September 30, 2021, and September 30, 2020, restaurant operations recognized $10,910 and $3,617, respectively, in franchise partner fees related to rental fees.~~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 sells gift cards to customers which can be redeemed for retail food sales within our stores. Gift cards are recorded as ~~deferred revenue~~a liability when issued and are subsequently recorded as net sales upon redemption. Restaurant operations estimates breakage related to gift cards when the likelihood of redemption is remote. This estimate utilizes historical trends based on the vintage of the gift card. Breakage on gift cards is recorded as other revenue in proportion to the rate of gift card redemptions by vintage.

Note 8. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses include the following.


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Accounts payable	Accounts payable	$	42,307	$	26,537	Accounts payable	$	34,946	$	36,684
Gift card liability		21,174		21,822
Gift card and other marketing						Gift card and other marketing	17,548		19,244
Insurance accruals	Insurance accruals	6,221		6,559		Insurance accruals	5,108		6,428
Salaries, wages and vacation	Salaries, wages and vacation	8,378		8,285		Salaries, wages and vacation	6,570		5,905
Deferred revenue	Deferred revenue	7,546		9,324		Deferred revenue	8,194		6,683
Taxes payable	Taxes payable	4,317		10,922		Taxes payable	16,038		11,392
Professional fees	Professional fees	6,169		5,882		Professional fees	7,969		11,731
Other	Other	4,786		1,561		Other	3,388		2,400
Accounts payable and accrued expenses	Accounts payable and accrued expenses	$	100,898	$	90,892	Accounts payable and accrued expenses	$	99,761	$	100,467

Note 9. Notes Payable ~~and Lease Obligations~~

Steak n Shake Credit Facility

On March 19, 2014, Steak n Shake and its subsidiaries entered into a credit agreement which provided for a senior secured term loan facility in an aggregate principal amount of $220,000. The term loan was scheduled to mature on March 19, 2021. ~~As of December 31, 2020, $152,506 was outstanding.~~ The Company repaid the balance of Steak n ~~Shake's outstanding balance in full~~Shake’s term facility on February 19, 2021.

~~Table of Contents~~

Note ~~9. Notes Payable~~10. Lease Assets and ~~Lease~~ Obligations~~(continued)~~

Lease obligations include the following.

Current portion of lease obligations September 30,
2021 December 31,
2020
Finance lease liabilities $ 1,536 $ 1,897
Finance obligations 4,948 4,854
Operating lease liabilities 10,746 10,614
Total current portion of lease obligations $ 17,230 $ 17,365
Long-term lease obligations
Finance lease liabilities $ 5,627 $ 7,034
Finance obligations 64,315 68,148
Operating leases liabilities 38,007 36,463
Total long-term lease obligations $ 107,949 $ 111,645

~~Note 10. Leased Assets and Lease Commitments~~


Current portion of lease obligations	March 31, 2022		December 31, 2021
Finance lease liabilities	$	1,318	$	1,414
Finance obligations	5,029		4,944
Operating lease liabilities	10,710		10,540
Total current portion of lease obligations	$	17,057	$	16,898

Long-term lease obligations
Finance lease liabilities	$	5,021	$	5,347
Finance obligations	62,327		63,119
Operating lease liabilities	33,808		36,013
Total long-term lease obligations	$	101,156	$	104,479

Nature of Leases

~~The Company operates~~Steak n Shake and Western Sizzlin operate restaurants that are located on sites owned by us and leased from third parties. In addition, ~~the Company owns~~they own sites and ~~leases~~lease sites from third parties that are leased and/or subleased to franchise partners and franchisees.

~~Company as Lessee~~Lease Costs

A significant portion of our operating and finance lease portfolio includes restaurant locations. ~~Operating~~We recognize fixed lease expense ~~and finance lease depreciation expense are recognized~~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.


		Third Quarter				First Nine Months					First Quarter
		2021		2020		2021		2020			2022		2021
Finance lease costs:	Finance lease costs:									Finance lease costs:
Amortization of right-of-use assets	Amortization of right-of-use assets	$	404	$	279	$	1,205	$	1,087	Amortization of right-of-use assets	$	363	$	419
Interest on lease liabilities	Interest on lease liabilities	126		136		399		392		Interest on lease liabilities	115		147
Operating lease costs *		240		2,096		1,403		8,321
Operating and variable lease costs										Operating and variable lease costs	3,612		3,765
Sublease income										Sublease income	(4,069)		(2,655)
Total lease costs	Total lease costs	$	770	$	2,511	$	3,007	$	9,800	Total lease costs	$	21	$	1,676

*Includes short-termSupplemental cash flow information related to leases ~~variable lease costs and sublease income.~~is as follows.


	First Quarter
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Financing cash flows from finance leases	$	421	$	529
Operating cash flows from finance leases	$	115	$	132
Operating cash flows from operating leases	$	3,067	$	4,186

Table of Contents

Note 10. ~~Leased~~Lease Assets and ~~Lease Commitments~~Obligations (continued)

~~Supplemental cash flow information related to leases is as follows.~~

First Nine Months
2021 2020
Cash paid for amounts included in the measurement of lease liabilities:
Financing cash flows from finance leases $ 1,226 $ 1,132
Operating cash flows from finance leases $ 384 $ 463
Operating cash flows from operating leases $ 9,806 $ 10,382
Right-of-use assets obtained in exchange for lease obligations:
Operating lease liabilities $ — $ 73

Supplemental balance sheet information related to leases is as follows.


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Finance leases:	Finance leases:					Finance leases:
Property and equipment, net	Property and equipment, net	$	6,005	$	6,501	Property and equipment, net	$	5,271	$	5,634

Weighted-average lease terms and discount rates are as follows.


	~~September 30,~~March 31, ~~2021~~2022
Weighted-average remaining lease terms:
Finance leases	~~5.2~~4.91 years
Operating leases	~~5.3~~4.99 years

Weighted-average discount rates:
Finance leases	7.0	%
Operating leases	6.9	%

Maturities of lease liabilities as of ~~September 30, 2021~~March 31, 2022 are as follows.


Year	Year	Operating Leases		Finance Leases		Year	Operating Leases		Finance Leases
2021		$	4,217	$	543
2022	2022	12,457		1,816		2022	$	10,298	$	1,298
2023	2023	11,204		1,551		2023	11,259		1,551
2024	2024	9,244		1,534		2024	9,433		1,534
2025	2025	7,605		1,298		2025	7,854		1,298
After 2025		13,699		1,814
2026						2026	5,203		959
After 2026						After 2026	8,730		855
Total lease payments	Total lease payments	58,426		8,556		Total lease payments	52,777		7,495
Less interest	Less interest	9,673		1,393		Less interest	8,259		1,156
Total lease liabilities	Total lease liabilities	$	48,753	$	7,163	Total lease liabilities	$	44,518	$	6,339

Lease Income

The components of lease income are as follows.


	First Quarter
	2022		2021
Operating lease income	$	4,724	$	2,363
Variable lease income	313		849
Total lease income	$	5,037	$	3,212

Table of Contents

Note 10. ~~Leased~~Lease Assets and ~~Lease Commitments~~Obligations (continued)

~~Company as Lessor~~

~~The components of lease income are as follows.~~

Third Quarter First Nine Months
2021 2020 2021 2020
Operating lease income $ 3,211 $ 1,428 $ 8,471 $ 3,259
Variable lease income 1,370 449 3,375 1,183
Total lease income $ 4,581 $ 1,877 $ 11,846 $ 4,442

The following table displays the ~~Company's~~Company’s future minimum rental receipts for non-cancelable leases and subleases as of ~~September 30, 2021.~~March 31, 2022. Franchise partner leases and subleases are short-term leases and have been excluded from the table.

Operating Leases
Year Subleases Owned Properties
2021 $ 190 $ 62
2022 725 247
2023 537 247
2024 454 247
2025 454 250
After 2025 1,916 1,052
Total future minimum receipts $ 4,276 $ 2,105


	Operating Leases
Year	Subleases		Owned Properties
2022	$	582	$	247
2023	371		247
2024	338		247
2025	273		255
2026	—		233
After 2026	—		753
Total future minimum receipts	$	1,564	$	1,982

Note 11. Accumulated Other Comprehensive Income

Accumulated other comprehensive ~~loss increased $49~~income decreased $231 and ~~decreased $344 during the third quarters of 2021 and 2020, respectively. During the first nine months of 2021, accumulated other comprehensive loss increased by $378 and decreased by $834~~$444 during the first ~~nine months~~quarters of ~~2020. As of September 30,~~2022 and 2021, ~~and 2020, the balances in accumulated other comprehensive loss were $1,909 and $1,976,~~ respectively. There were no reclassifications from accumulated other comprehensive loss to earnings during the first ~~nine months~~quarters of ~~2021~~2022 and ~~2020.~~2021. All changes in accumulated other comprehensive loss were due to foreign currency translation adjustments.

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 2022 and a discrete effective tax rate method based on statutory tax rates for the first ~~nine months~~quarter of ~~2021 and 2020.~~2021. Our periodic effective income tax rate is affected by the relative mix of ~~pre-tax~~pretax earnings or losses and underlying income tax rates applicable to the various taxing jurisdictions.

Income tax benefit for the ~~third~~first quarter of ~~2021~~2022 was ~~$4,274~~$171 compared to an income tax expense of ~~$5,617 for the third quarter of 2020. Income tax expense~~$22,016 for the first ~~nine months~~quarter of ~~2021 was $11,544 compared to a benefit of $23,449 for the first nine months of 2020.~~2021. The variance in income taxes between ~~2021~~2022 and ~~2020~~2021 is attributable to taxes on income generated by the investment partnerships. Investment partnership pretax ~~gains~~losses were ~~$27,344~~$6,661 during the first ~~nine months~~quarter of ~~2021~~2022 compared to pretax ~~losses~~gains of ~~$89,276~~$81,766 during the first ~~nine months~~quarter of ~~2020.~~2021.

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.

~~Table of Contents~~

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.

Table of Contents

Note 14. Fair Value of Financial Assets (continued)

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 ~~within~~as Level 1 of the fair value hierarchy.

Equity securities: The Company’s investments in equity securities are classified ~~within~~as Levels 1 and 2 of the fair value hierarchy.

Bonds: The Company’s investments in bonds consist of both corporate and government debt. Bonds are classified ~~within~~as Level l or Level 2 of the fair value hierarchy.

Non-qualified deferred compensation plan investments: The assets of the non-qualified plan are set up in a rabbi trust. They represent mutual funds and publicly traded securities, each of which are classified ~~within~~as Level 1 of the fair value hierarchy.

Derivative instruments: Options related to equity securities are marked to market each reporting period and are classified ~~within~~as Level 2 of the fair value hierarchy depending on the instrument.

Table of Contents

Note 14. Fair Value of Financial Assets (continued)

As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the fair values of financial assets were as follows.


		September 30, 2021								December 31, 2020									March 31, 2022								December 31, 2021
		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets	Assets																	Assets
Cash equivalents	Cash equivalents	$	25,575	$	—	$	—	$	25,575	$	23,885	$	—	$	—	$	23,885	Cash equivalents	$	17,790	$	—	$	—	$	17,790	$	18,447	$	—	$	—	$	18,447
Equity securities	Equity securities																	Equity securities
Consumer goods	Consumer goods	8,349		2,810		—		11,159		7,274		5,652		—		12,926		Consumer goods	9,836		2,003		—		11,839		10,775		2,368		—		13,143
Insurance	Insurance	4,536		—		—		4,536		261		—		—		261		Insurance	134		—		—		134		6,513		—		—		6,513
Technology																		Technology	2,878		—		—		2,878		2,887		—		—		2,887
Bonds	Bonds																	Bonds
Government	Government	52,876		—		—		52,876		39,472		14,043		—		53,515		Government	66,413		—		—		66,413		54,584		—		—		54,584
Corporate	Corporate	6,947		—		—		6,947		—		5,406		—		5,406		Corporate	4,100		—		—		4,100		4,512		—		—		4,512
Options on equity securities	Options on equity securities	—		1,653		—		1,653		—		2,911		—		2,911		Options on equity securities	—		2,461		—		2,461		—		2,095		—		2,095
Non-qualified deferred compensation plan investments	Non-qualified deferred compensation plan investments	1,596		—		—		1,596		1,368		—		—		1,368		Non-qualified deferred compensation plan investments	1,528		—		—		1,528		1,607		—		—		1,607
Total assets at fair value	Total assets at fair value	$	99,879	$	4,463	$	—	$	104,342	$	72,260	$	28,012	$	—	$	100,272	Total assets at fair value	$	102,679	$	4,464	$	—	$	107,143	$	99,325	$	4,463	$	—	$	103,788

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 and Biglari Capital Corp. (collectively, the “Biglari Entities”) under which the Biglari Entities provide business and administrative related services to the Company. The Biglari Entities are owned by Mr. Biglari. The service agreement has a ~~five-year~~five-year term, effective on October 1, 2017.

The Company paid Biglari Enterprises ~~$6,300~~$2,100 in service fees during the first ~~nine months~~quarter of ~~2021~~2022 and ~~2020.~~2021. The service agreement does not alter the hurdle rate connected with the incentive reallocation paid to Biglari Capital Corp. ~~The Biglari Entities are owned by Mr. Biglari.~~

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. In any year in which book value declines, our operating businesses must completely recover their deficit from the previous High Water Mark, along with attaining the Hurdle Rate, before Mr. Biglari becomes eligible to receive any further incentive payment.

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. The Company also reports segment information for Maxim and Southern Oil. Other business activities not specifically identified with reportable business segments are presented in corporate. 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.

Table of ~~Contents~~Content

Note 16. Business Segment Reporting (continued)

A disaggregation of our consolidated data for the ~~third~~first quarters of 2022 and ~~first nine months of~~ 2021 ~~and 2020~~ is presented in the tables ~~that~~which follow.


		Revenue									Revenue
		Third Quarter				First Nine Months					First Quarter
		2021		2020		2021		2020			2022		2021
Operating Businesses:	Operating Businesses:									Operating Businesses:
Restaurant Operations:	Restaurant Operations:									Restaurant Operations:
Steak n Shake	Steak n Shake	$	56,993	$	78,313	$	190,517	$	267,637	Steak n Shake	$	57,753	$	68,301
Western Sizzlin	Western Sizzlin	2,151		1,361		5,907		4,945		Western Sizzlin	2,094		1,653
Total Restaurant Operations	Total Restaurant Operations	59,144		79,674		196,424		272,582		Total Restaurant Operations	59,847		69,954

Insurance Operations:	Insurance Operations:									Insurance Operations:
Underwriting										Underwriting
First Guard	First Guard	8,656		7,898		25,250		23,194		First Guard	8,731		8,077
Southern Pioneer	Southern Pioneer	6,067		6,515		18,479		15,498		Southern Pioneer	5,438		5,613
Investment income and other										Investment income and other	910		929
Total Insurance Operations	Total Insurance Operations	14,723		14,413		43,729		38,692		Total Insurance Operations	15,079		14,619

Southern Oil	Southern Oil	7,353		6,029		24,310		19,554		Southern Oil	9,812		8,592
Maxim	Maxim	863		1,719		2,695		3,209		Maxim	634		1,123
		$	82,083	$	101,835	$	267,158	$	334,037		$	85,372	$	94,288

Earnings (Losses) Before Income Taxes
Third Quarter First Nine Months
2021 2020 2021 2020
Operating Businesses:
Restaurant Operations:
Steak n Shake $ (2,959) $ (63) $ 5,733 $ (6,362)
Western Sizzlin 247 (396) 707 (937)
Total Restaurant Operations (2,712) (459) 6,440 (7,299)
Insurance Operations:
First Guard 2,934 2,152 8,204 7,193
Southern Pioneer 908 518 3,194 1,458
Total Insurance Operations 3,842 2,670 11,398 8,651
Southern Oil 2,982 592 9,047 1,355
Maxim (56) 1,150 867 1,605
Interest expense not allocated to segments — (2,150) (1,121) (6,973)
Total Operating Businesses 4,056 1,803 26,631 (2,661)
Corporate and Investments:
Corporate and other (3,302) (2,657) (8,595) (7,693)
Investment gains 4,534 354 6,465 1,863
Investment partnership gains (losses) (20,231) 27,218 27,344 (89,276)
Total Corporate and Investments (18,999) 24,915 25,214 (95,106)
$ (14,943) $ 26,718 $ 51,845 $ (97,767)

Table of Content

Note 16. Business Segment Reporting (continued)


	Earnings (Losses) Before Income Taxes
	First Quarter
	2022		2021
Operating Businesses:
Restaurant Operations:
Steak n Shake	$	4,198	$	5,456
Western Sizzlin	232		92
Total Restaurant Operations	4,430		5,548

Insurance Operations:
Underwriting:
First Guard	732		2,131
Southern Pioneer	(337)		413
Investment income and other	969		693
Total Insurance Operations	1,364		3,237

Southern Oil	3,921		3,039
Maxim	(336)		623
Interest expense not allocated to segments	—		(1,121)
Total Operating Businesses	9,379		11,326

Corporate and other	(3,412)		(2,450)
Investment gains	225		3,081
Investment partnership gains (losses)	(6,661)		81,766

	$	(469)	$	93,723

Table of Contents

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, ~~media~~licensing and ~~licensing,~~media, restaurants, and oil and gas. The Company’s largest operating subsidiaries are involved in the franchising and operating of restaurants. Biglari Holdings ~~was~~is founded and is led by Sardar Biglari, Chairman and Chief Executive Officer of the Company. ~~The Company’s long-term objective is to maximize per-share intrinsic value.~~

On March 9, 2020, Biglari Holdings acquired the stock of Southern Pioneer Property & Casualty Insurance Company and its agency, Southern Pioneer Insurance Agency, Inc. (collectively “Southern Pioneer”). The Company's financial results include the results of Southern Pioneer from the date of acquisition.

Net earnings (loss) attributable to Biglari Holdings shareholders are disaggregated in the table that follows. Amounts are recorded after deducting income taxes.


		Third Quarter				First Nine Months					First Quarter
		2021		2020		2021		2020			2022		2021
Operating businesses:	Operating businesses:									Operating businesses:
Restaurant	Restaurant	$	(1,515)	$	(15)	$	5,146	$	(6,199)	Restaurant	$	3,262	$	4,118
Insurance	Insurance	2,985		2,204		8,902		6,819		Insurance	1,044		2,531
Oil and gas	Oil and gas	2,325		389		7,016		1,278		Oil and gas	2,924		2,355
Media and licensing		(43)		885		662		1,236
Brand licensing										Brand licensing	(251)		480
Interest expense	Interest expense	—		(1,612)		(841)		(5,219)		Interest expense	—		(841)
Corporate and other										Corporate and other	(2,651)		(1,999)
Total operating businesses	Total operating businesses	3,752		1,851		20,885		(2,085)		Total operating businesses	4,328		6,644
Corporate and other		(2,526)		(2,081)		(6,649)		(5,762)
Investment gains	Investment gains	3,390		276		4,896		1,468		Investment gains	175		2,414
Investment partnership gains (losses)	Investment partnership gains (losses)	(15,285)		21,055		21,169		(67,939)		Investment partnership gains (losses)	(4,801)		62,649
		$	(10,669)	$	21,101	$	40,301	$	(74,318)		$	(298)	$	71,707

~~Restaurant businesses include Steak n Shake Inc. and Western Sizzlin Corporation. Steak n Shake and Western Sizzlin are engaged in the ownership, operation, and franchising of restaurants.~~

Insurance businesses are composed of First Guard Insurance Company ("First Guard") and Southern Pioneer. First Guard is a direct underwriter of commercial trucking insurance, selling physical damage and nontrucking liability insurance to truckers. Southern Pioneer underwrites garage liability insurance, commercial property, as well as homeowners and dwelling fire insurance.

~~Oil and gas business is composed of Southern Oil Company ("Southern Oil").~~

~~Media and licensing business is composed of Maxim Inc.~~

~~Table of Contents~~

~~Item 2. 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 ~~581~~575 company-operated and franchise restaurants as of ~~September 30, 2021.~~March 31, 2022.


		Steak n Shake			Western Sizzlin				Steak n Shake			Western Sizzlin
									Company- operated	Franchise Partner	Traditional Franchise	Company- operated	Franchise	Total
Total stores as of December 31, 2021								Total stores as of December 31, 2021	199	159	178	3	38	577
Corporate stores transitioned								Corporate stores transitioned	(12)	12	—	—	—	—
Net restaurants opened (closed)								Net restaurants opened (closed)	(3)	—	1	—	—	(2)
Total stores as of March 31, 2022								Total stores as of March 31, 2022	184	171	179	3	38	575
		Company- operated	Franchise Partner	Traditional Franchise	Company- operated	Franchise	Total
Total stores as of December 31, 2020	Total stores as of December 31, 2020	276	86	194	3	39	598	Total stores as of December 31, 2020	276	86	194	3	39	598
Corporate stores transitioned	Corporate stores transitioned	(54)	54	—	—	—	—	Corporate stores transitioned	(22)	22	—	—	—	—
Net restaurants opened (closed)	Net restaurants opened (closed)	(1)	—	(15)	—	(1)	(17)	Net restaurants opened (closed)	(1)	—	(5)	—	(1)	(7)
Total stores as of September 30, 2021		221	140	179	3	38	581

Total stores as of December 31, 2019		368	29	213	4	48	662
Corporate stores transitioned		(41)	40	1	—	—	—
Net restaurants opened (closed)		(67)	—	(15)	(1)	(9)	(92)
Total stores as of September 30, 2020		260	69	199	3	39	570
Total stores as of March 31, 2021								Total stores as of March 31, 2021	253	108	189	3	38	591

As of ~~September 30, 2021, 42~~March 31, 2022, 40 of the ~~221~~184 company-operated Steak n Shake stores were ~~temporarily~~ closed. We plan to refranchise a majority of our closed company-operated restaurants.

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

~~Earnings of our restaurant~~Restaurant operations are summarized below.


		Third Quarter								First Nine Months									First Quarter
		2021				2020				2021				2020					2022				2021
Revenue	Revenue																	Revenue
Net sales	Net sales	$	41,916			$	67,617			$	146,269			$	241,832			Net sales	$	38,216			$	54,950
Franchise partner fees	Franchise partner fees	11,508				6,894				31,744				14,775				Franchise partner fees	15,624				7,853
Franchise royalties and fees	Franchise royalties and fees	4,865				4,421				14,594				13,704				Franchise royalties and fees	5,146				5,135
Other revenue	Other revenue	855				742				3,817				2,271				Other revenue	861				2,016
Total revenue	Total revenue	59,144				79,674				196,424				272,582				Total revenue	59,847				69,954

Restaurant cost of sales	Restaurant cost of sales																	Restaurant cost of sales
Cost of food	Cost of food	13,123		31.3	%	19,508		28.9	%	43,404		29.7	%	70,880		29.3	%	Cost of food	10,960		28.7	%	15,554		28.3	%
Restaurant operating costs	Restaurant operating costs	24,496		58.4	%	30,451		45.0	%	71,751		49.1	%	110,903		45.9	%	Restaurant operating costs	20,032		52.4	%	25,197		45.9	%
Occupancy costs	Occupancy costs	4,075		9.7	%	4,103		6.1	%	14,142		9.7	%	12,954		5.4	%	Occupancy costs	4,360		11.4	%	4,865		8.9	%
Total cost of sales	Total cost of sales	41,694				54,062				129,297				194,737				Total cost of sales	35,352				45,616

Selling, general and administrative	Selling, general and administrative																	Selling, general and administrative
General and administrative	General and administrative	9,255		15.6	%	12,059		15.1	%	27,416		14.0	%	30,146		11.1	%	General and administrative	8,650		14.5	%	7,680		11.0	%
Marketing	Marketing	2,302		3.9	%	3,891		4.9	%	10,212		5.2	%	18,406		6.8	%	Marketing	3,744		6.3	%	4,623		6.6	%
Other expenses	Other expenses	1,332		2.3	%	454		0.6	%	2,266		1.2	%	1,721		0.6	%	Other expenses	45		0.1	%	(141)		(0.2)	%
Total selling, general and administrative	Total selling, general and administrative	12,889		21.8	%	16,404		20.6	%	39,894		20.3	%	50,273		18.4	%	Total selling, general and administrative	12,439		20.8	%	12,162		17.4	%

Impairments	Impairments	—				(3,698)				(559)				(21,817)				Impairments	—				(298)
Depreciation and amortization	Depreciation and amortization	(5,811)				(4,376)				(15,615)				(14,088)				Depreciation and amortization	(6,214)				(4,710)
Gain on debt extinguishment		—				—				—				5,713
Interest on finance leases and obligations	Interest on finance leases and obligations	(1,462)				(1,593)				(4,619)				(4,679)				Interest on finance leases and obligations	(1,412)				(1,620)

Earnings (loss) before income taxes	Earnings (loss) before income taxes	(2,712)				(459)				6,440				(7,299)				Earnings (loss) before income taxes	4,430				5,548

Income tax expense (benefit)	Income tax expense (benefit)	(1,197)				(444)				1,294				(1,100)				Income tax expense (benefit)	1,168				1,430

Contribution to net earnings	Contribution to net earnings	$	(1,515)			$	(15)			$	5,146			$	(6,199)			Contribution to net earnings	$	3,262			$	4,118

Cost of food, restaurant operating costs, and occupancy costs are expressed as a percentage of net sales.

General and administrative, marketing and other expenses are expressed as a percentage of total revenue.

The novel coronavirus (“COVID-19”) ~~was~~, declared a pandemic by the World Health Organization in March ~~of 2020. Government and private sector responses~~2020, caused governments to impose restrictive measures to contain its ~~spread began to affect our operating businesses significantly that same month.~~spread. The COVID-19 pandemic ~~has~~ adversely affected our restaurant operations ~~as our~~and financial results. Our restaurants were required to close their dining rooms during the first quarter of 2020.

The majority of Steak n Shake’s dining rooms ~~remained closed through the end of 2020. Steak n Shake has been reopening its dining rooms this year,~~were reopened during 2021, and in doing so ~~has implemented~~ a self-service ~~model. The transformation~~model has resulted in higher capital expenditures in 2021 as compared to 2020. In the first nine months of 2021, Steak n Shake spent $29,708 in capital expenditures related to the conversion of table-service restaurants to self-service restaurants.been implemented.

~~Table of Contents~~

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~ ~~(continued)~~

Net sales for ~~the third quarter and first nine months of 2021~~2022 were ~~$41,916 and $146,269, respectively,~~$38,216, representing a decrease of ~~$25,701~~$16,734 or ~~38.0%, and $95,563 or 39.5%,~~30.5% compared to ~~the third quarter and first nine months of 2020, respectively.~~2021. The ~~year-over-year~~ decrease in revenue of ~~company-operated~~company-owned restaurants is primarily due to the shift of company units to franchise partner units. 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 ~~restaurants’~~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 continue to decline ~~with each~~as we transition ~~of a~~from company-operated ~~unit~~units to a franchise partner ~~unit.~~units.

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Franchise partner fees were ~~$11,508~~$15,624 during ~~the third quarter of 2021,~~2022, as compared to ~~$6,894~~$7,853 during ~~the third quarter of 2020. Franchise partner fees were $31,744 during the first nine months of 2021, compared to $14,775 during the first nine months of 2020.~~2021. As of ~~September 30, 2021,~~March 31, 2022, there were ~~140~~171 franchise partner units, compared to 69108 franchise partner units as of ~~September 30, 2020.~~March 31, 2021. For a franchise partner to be awarded a restaurant, he or she must demonstrate the gold standard in service.

The franchise royalties and fees generated by the traditional franchising business were $5,146 during 2022, as compared to $5,135 during 2021.

The cost of food ~~during the third quarter and first nine months~~in 2022 was $10,960 or 28.7% of ~~2021 was $13,123, and $43,404, respectively,~~net sales, as compared to ~~$19,508, and $70,880~~$15,554 or 28.3% of net sales in 2021. The decrease in cost was due to a reduction in the ~~third quarter and first nine months~~number of ~~2020, respectively.~~company-operated stores. Restaurant operating costs during ~~the third quarter of 2021~~2022 were ~~$24,496, compared to $30,451 in the third quarter of 2020. Restaurant operating costs during the first nine months of 2021 were $71,751, compared to $110,903 in the first nine months of 2020.The decreases in cost of food and operating costs are mainly attributable to the transitioning of company-operated units to franchise partner units. The increase in operating costs as a percentage~~$20,032 or 52.4% of net sales, ~~is mainly attributable~~as compared to ~~increasing wages. The Company expects to increase menu prices~~$25,197 or 45.9% of net sales in ~~the fourth quarter to improve margins.~~2021.

General and administrative costs ~~during the third quarter and first nine months of 2021 were $9,255 and $27,416, respectively,~~increased by $970 in 2022 compared to ~~$12,059 and $30,146 in the third quarter and first nine months of 2020, respectively.The year-over-year general and administrative costs were lower in~~ 2021, primarily because of ~~legal and professional fees incurred during the third quarter~~an increase in personnel costs.Marketing expenses were relatively flat as a percentage of ~~2020.~~total revenue in 2022 as compared to 2021.

~~Marketing expenses during the third quarter and first nine months~~The Company recorded impairment charges of 2021 were $2,302 and $10,212, respectively, compared to $3,891 and $18,406 during the third quarter and first nine months of 2020, respectively. Marketing expenses decreased primarily due to the decision to shift to a digital marketing strategy.

~~Our restaurants recorded an impairment to long-lived assets of $0 and $3,698 in the third quarters of 2021 and 2020, respectively, and $559 and $21,817~~$298 in the first ~~nine months~~quarter of 2021 ~~and 2020, respectively. The 2021~~related to underperforming stores. There were no impairments ~~are primarily attributable to Steak n Shake store closures. The 2020 impairments were connected to dining room closures during the pandemic.~~in 2022.

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. ~~Business~~Our business units are operated under separate local management. Biglari Holdings’ insurance operations consist of First Guard and Southern Pioneer.

Underwriting results of our insurance operations are summarized below.


		Third Quarter				First Nine Months					First Quarter
		2021		2020		2021		2020			2022		2021
Underwriting gain attributable to:	Underwriting gain attributable to:									Underwriting gain attributable to:
First Guard	First Guard	$	2,832	$	2,077	$	7,922	$	6,953	First Guard	$	732	$	2,131
Southern Pioneer	Southern Pioneer	397		60		1,511		(229)		Southern Pioneer	(337)		413
Pre-tax underwriting gain		3,229		2,137		9,433		6,724
Pretax underwriting gain										Pretax underwriting gain	395		2,544
Income tax expense	Income tax expense	681		449		1,984		1,412		Income tax expense	83		534
Net underwriting gain	Net underwriting gain	$	2,548	$	1,688	$	7,449	$	5,312	Net underwriting gain	$	312	$	2,010

Earnings of our insurance operations are summarized below.


	First Quarter
	2022		2021
Premiums earned	$	14,169	$	13,690
Insurance losses	9,588		7,021
Underwriting expenses	4,186		4,125
Pretax underwriting gain	395		2,544
Other income and expenses
Investment income	213		166
Other income (expenses)	756		527
Total other income	969		693
Earnings before income taxes	1,364		3,237
Income tax expense	320		706
Contribution to net earnings	$	1,044	$	2,531

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

~~Earnings of our insurance operations are summarized below.~~

Third Quarter First Nine Months
2021 2020 2021 2020
Premiums written $ 13,901 $ 13,427 $ 41,166 $ 35,590
Insurance losses 6,657 7,419 20,040 18,494
Underwriting expenses 4,015 3,871 11,693 10,372
Pre-tax underwriting gain 3,229 2,137 9,433 6,724
Other income and expenses
Investment income and commissions 646 817 2,033 2,749
Other expenses (33) (284) (68) (822)
Total other income 613 533 1,965 1,927
Earnings before income taxes 3,842 2,670 11,398 8,651
Income tax expense 857 466 2,496 1,832
Contribution to net earnings $ 2,985 $ 2,204 $ 8,902 $ 6,819

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~~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.


		Third Quarter								First Nine Months									First Quarter
		2021				2020				2021				2020					2022				2021
		Amount		%		Amount		%		Amount		%		Amount		%			Amount		%		Amount		%
Premiums written		$	8,458	100.0	%	$	7,505	100.0	%	$	24,760	100.0	%	$	22,195	100.0	%
Premiums earned																		Premiums earned	$	8,731	100.0	%	$	8,077	100.0	%

Insurance losses	Insurance losses	3,935		46.5	%	3,736		49.8	%	11,746		47.4	%	10,268		46.3	%	Insurance losses	6,188		70.9	%	4,002		49.5	%
Underwriting expenses	Underwriting expenses	1,691		20.0	%	1,692		22.5	%	5,092		20.6	%	4,974		22.4	%	Underwriting expenses	1,811		20.7	%	1,944		24.1	%
Total losses and expenses	Total losses and expenses	5,626		66.5	%	5,428		72.3	%	16,838		68.0	%	15,242		68.7	%	Total losses and expenses	7,999		91.6	%	5,946		73.6	%
Pre-tax underwriting gain		$	2,832			$	2,077			$	7,922			$	6,953
Pretax underwriting gain																		Pretax underwriting gain	$	732			$	2,131

~~Table of Contents~~

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~ ~~(continued)~~

Southern Pioneer

Southern Pioneer underwrites garage liability ~~insurance,~~and commercial property insurance, as well as homeowners and dwelling fire insurance. ~~The financial results for Southern Pioneer are from the date of acquisition March 9, 2020.~~ A summary of Southern Pioneer’s underwriting results follows.


		Third Quarter								First Nine Months									First Quarter
		2021				2020				2021				2020					2022				2021
		Amount		%		Amount		%		Amount		%		Amount		%			Amount		%		Amount		%
Premiums written		$	5,443	100.0	%	$	5,922	100.0	%	$	16,406	100.0	%	$	13,395	100.0	%
Premiums earned																		Premiums earned	$	5,438	100.0	%	$	5,613	100.0	%

Insurance losses	Insurance losses	2,722		50.0	%	3,683		62.2	%	8,294		50.6	%	8,226		61.4	%	Insurance losses	3,400		62.5	%	3,019		53.8	%
Underwriting expenses	Underwriting expenses	2,324		42.7	%	2,179		36.8	%	6,601		40.2	%	5,398		40.3	%	Underwriting expenses	2,375		43.7	%	2,181		38.9	%
Total losses and expenses	Total losses and expenses	5,046		92.7	%	5,862		99.0	%	14,895		90.8	%	13,624		101.7	%	Total losses and expenses	5,775		106.2	%	5,200		92.7	%
Pre-tax underwriting gain		$	397			$	60			$	1,511			$	(229)
Pretax underwriting gain (loss)																		Pretax underwriting gain (loss)	$	(337)			$	413

Insurance - Investment Income

A summary of net investment income attributable to our insurance operations follows.


		Third Quarter				First Nine Months					First Quarter
		2021		2020		2021		2020			2022		2021
Interest, dividends and other investment income:	Interest, dividends and other investment income:									Interest, dividends and other investment income:
First Guard	First Guard	$	54	$	75	$	84	$	246	First Guard	$	74	$	17
Southern Pioneer	Southern Pioneer	141		121		568		821		Southern Pioneer	139		149
Pre-tax investment income		195		196		652		1,067
Pretax investment income										Pretax investment income	213		166
Income tax expense	Income tax expense	41		41		137		224		Income tax expense	45		35
Net investment income	Net investment income	$	154	$	155	$	515	$	843	Net investment income	$	168	$	131

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.

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Oil and Gas

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.

Third Quarter First Nine Months
2021 2020 2021 2020
Oil and gas revenue $ 7,353 $ 6,029 $ 24,310 $ 19,554
Oil and gas production costs 2,050 2,171 6,957 6,570
Depreciation, depletion and accretion 1,717 2,804 6,286 9,651
General and administrative expenses 604 462 2,020 1,978
Earnings before income taxes 2,982 592 9,047 1,355
Income tax expense 657 203 2,031 77
Contribution to net earnings $ 2,325 $ 389 $ 7,016 $ 1,278

~~Table of Contents~~

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~ ~~(continued)~~

The COVID-19 pandemic caused oil demand to significantly decrease in early 2020, creating oversupplied markets that resulted in lower commodity prices and margins. However, crude oil prices increased in mid-2020 in response to the lifting of COVID-19 restrictions.


	First Quarter
	2022		2021
Oil and gas revenue	$	9,812	$	8,592
Oil and gas production costs	3,819		2,413
Depreciation, depletion and accretion	1,519		2,378
General and administrative expenses	553		762
Earnings before income taxes	3,921		3,039
Income tax expense	997		684
Contribution to net earnings	$	2,924	$	2,355

~~Media and~~Brand Licensing

~~Maxim's~~Maxim’s business lies principally in ~~media~~licensing and ~~licensing.~~media. Earnings of ~~our media and licensing~~ operations are summarized below.


		Third Quarter				First Nine Months					First Quarter
		2021		2020		2021		2020			2022		2021
Media and licensing revenue		$	863	$	1,719	$	2,695	$	3,209
Licensing and media revenue										Licensing and media revenue	$	634	$	1,123

Media and licensing costs		880		548		1,749		1,491
Licensing and media costs										Licensing and media costs	953		480
General and administrative expenses	General and administrative expenses	39		21		79		113		General and administrative expenses	17		20
Earnings before income taxes	Earnings before income taxes	(56)		1,150		867		1,605		Earnings before income taxes	(336)		623
Income tax expense (benefit)	Income tax expense (benefit)	(13)		265		205		369		Income tax expense (benefit)	(85)		143
Contribution to net earnings	Contribution to net earnings	$	(43)	$	885	$	662	$	1,236	Contribution to net earnings	$	(251)	$	480

We acquired Maxim with the idea of transforming its business model. The magazine developed the Maxim brand, a franchise we are utilizing to generate nonmagazine revenue, notably through licensing, a cash-generating business related to consumer products, services, and events.

Investment Gains and Investment Partnership Gains

Investment gains net of tax for the ~~third~~first quarter of 2022 and ~~first nine months of~~ 2021 were ~~$3,390~~$175 and ~~$4,896,~~$2,414, respectively. Investment gains net of tax were $276 and $1,468 during the third quarter and first nine months of 2020, respectively. Investment gains during the third quarter of 2021 included a gain from the sale of real estate of $3,785, net of tax.Dividends earned on investments are reported as ~~other~~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.

Earnings (loss) from our investments in partnerships are summarized below.


		Third Quarter				First Nine Months					First Quarter
		2021		2020		2021		2020			2022		2021
Investment partnership gains (losses)	Investment partnership gains (losses)	$	(20,231)	$	27,218	$	27,344	$	(89,276)	Investment partnership gains (losses)	$	(6,661)	$	81,766
Tax expense (benefit)	Tax expense (benefit)	(4,946)		6,163		6,175		(21,337)		Tax expense (benefit)	(1,860)		19,117
Contribution to net earnings	Contribution to net earnings	$	(15,285)	$	21,055	$	21,169	$	(67,939)	Contribution to net earnings	$	(4,801)	$	62,649

Investment partnership gains include gains/losses from changes in market values of underlying investments and dividends earned by the partnerships. Dividend income has a lower effective tax rate than income from capital gains. ~~Changes~~These gains and losses have caused and will continue to cause significant volatility in ~~the market values~~our periodic earnings.

Table of ~~investments can be highly volatile.~~ Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

The investment partnerships hold the Company’s common stock as investments. 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. Gains and losses on Company common stock included in the earnings of the partnerships are ~~eliminated.~~eliminated in the Company’s consolidated financial results.

Investments affect our reported quarterly earnings based on their carrying value. We do not regard the quarterly or annual fluctuations in our investments to be meaningful in understanding the operating results of our businesses.

~~Table of Contents~~

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~ ~~(continued)~~

Interest Expense

The Company’s interest expense is summarized below.


		Third Quarter				First Nine Months					First Quarter
		2021		2020		2021		2020			2022		2021
Interest expense on notes payable	Interest expense on notes payable	$	—	$	2,150	$	1,121	$	6,973	Interest expense on notes payable	$	—	$	1,121
Tax benefit	Tax benefit	—		538		280		1,754		Tax benefit	—		280
Interest expense net of tax	Interest expense net of tax	$	—	$	1,612	$	841	$	5,219	Interest expense net of tax	$	—	$	841

Steak n Shake’s term loan was scheduled to mature on March 19, 2021. ~~As of December 31, 2020, $152,506 was outstanding.~~ The Company repaid Steak n ~~Shake's~~Shake’s outstanding balance in full on February 19, 2021.

Corporate and Other

Corporate expenses exclude the activities inof the restaurant, ~~media and~~insurance, brand licensing, ~~insurance,~~ and oil and gas businesses. Corporate and other net losses during the ~~third~~first quarter ~~and first nine months~~ of ~~2021~~2022 were relatively flat compared to the same period during ~~2020.~~2021.

Income Taxes

Financial Condition

Consolidated cash and investments are summarized below.


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Cash and cash equivalents	Cash and cash equivalents	$	27,795	$	24,503	Cash and cash equivalents	$	45,777	$	42,349
Investments	Investments	99,006		94,861		Investments	87,150		83,061
Fair value of interest in investment partnerships	Fair value of interest in investment partnerships	533,996		590,926		Fair value of interest in investment partnerships	471,792		474,201
Total cash and investments	Total cash and investments	660,797		710,290		Total cash and investments	604,719		599,611
Less: portion of Company stock held by investment partnerships	Less: portion of Company stock held by investment partnerships	(260,907)		(171,376)		Less: portion of Company stock held by investment partnerships	(229,424)		(223,802)
Carrying value of cash and investments on balance sheet	Carrying value of cash and investments on balance sheet	$	399,890	$	538,914	Carrying value of cash and investments on balance sheet	$	375,295	$	375,809

~~Liquidity~~

~~Our balance sheet continues to maintain significant liquidity. Consolidated cash flow activities~~Unrealized gains/losses of Biglari Holdings’ stock held by the investment partnerships are ~~summarized below.~~

First Nine Months
2021 2020
Net cash provided by operating activities $ 211,245 $ 106,367
Net cash used in investing activities (55,782) (112,081)
Net cash used in financing activities (154,586) (26,381)
Effect of exchange rate changes on cash (85) (13)
Increase (decrease) in cash, cash equivalents and restricted cash $ 792 $ (32,108)
eliminated in the Company’s consolidated financial results.

2423

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Liquidity

Our balance sheet continues to maintain significant liquidity. Consolidated cash flow activities are summarized below.


	First Quarter
	2022		2021
Net cash provided by operating activities	$	21,092	$	165,298
Net cash used in investing activities	(16,077)		(8,780)
Net cash used in financing activities	(1,564)		(152,561)
Effect of exchange rate changes on cash	(23)		(22)
Increase in cash, cash equivalents and restricted cash	$	3,428	$	3,935

Cash provided by operating activities was ~~$211,245~~$21,092 during ~~the first nine months of 2021~~2022 compared to ~~cash provided by operating activities of $106,367 during the first nine months of 2020.~~$165,298 in 2021. The ~~increase~~decrease in cash provided by operating activities is mainly attributable to distributions from investment partnerships of ~~$172,420~~$4,500 for ~~2021~~2022 and ~~$97,330~~$150,570 for ~~2020.~~2021. The distributions during 2021 were primarily used to repay Steak n ~~Shake's~~Shake’s debt.

Cash used in investing activities during ~~the first nine months of 2021~~2022 was ~~$55,782~~$16,077 compared to ~~$112,081 during the first nine months of 2020. Use of cash~~$8,780 in ~~investing activities was higher during 2020 primarily due to the acquisition of Southern Pioneer and purchases of limited partner interests.~~2021. Capital expenditures ~~increased~~were $1,846 higher in 2022 compared to 2021. The increase in capital expenditures relates to Steak n Shake’s continued transformation to counter service. Proceeds from property disposals were $2,640 higher during 2021 compared to ~~2020 primarily because~~2022. Purchases of ~~expenditures associated with~~investments, net of maturities and sales, were $2,811 higher during 2022 compared to 2021.

Cash used in financing activities was $150,997 higher in 2021 compared to 2022. The Company repaid Steak n ~~Shake's transition to a counter service model.~~Shake’s debt and made principal payments on direct financing lease obligations of $152,561 during 2021.

We intend to meet the working capital needs of our operating subsidiaries principally through anticipated cash flows generated from operations and cash on hand. We continually review available financing alternatives.

Steak n Shake Credit Facility

Critical Accounting Policies

Management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. Certain accounting policies require management to make estimates and judgments concerning transactions that will be settled several years in the future. Amounts recognized in our consolidated financial statements from such estimates are necessarily based on numerous assumptions involving varying and potentially significant degrees of judgment and uncertainty. Accordingly, the amounts currently reflected in our consolidated financial statements will likely increase or decrease in the future as additional information becomes available. There have been no material changes to critical accounting policies previously disclosed in our annual report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Recently Issued Accounting Pronouncements

No recently issued accounting pronouncements were applicable for this Quarterly Report on Form 10-Q.

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Cautionary Note Regarding Forward-Looking Statements

This report includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In general, forward-looking statements include estimates of future revenues, cash flows, capital expenditures, or other financial items, and assumptions underlying any of the foregoing. Forward-looking statements reflect management’s current expectations regarding future events and use words such as “anticipate,” “believe,” “expect,” “may,” and other similar terminology. A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. Investors should not place undue reliance on the forward-looking statements, which speak only as of the date of this report. These forward-looking statements are all based on currently available operating, financial, and competitive information and are subject to various risks and uncertainties. Our actual future results and trends may differ materially depending on a variety of factors, many beyond our control, including, but not limited to, the risks and uncertainties described in Item 1A, Risk Factors of our annual report on Form 10-K and Item 1A of this report. We undertake no obligation to publicly update or revise them, except as may be required by law.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The majority of our investments are conducted through investment partnerships which generally hold common stocks. We also hold marketable securities directly. Through investment partnerships we hold concentrated positions. A significant decline in the general stock market or in the prices of major investments may produce a large net loss and decrease in our consolidated shareholders’ equity. Decreases in values of equity investments can have a materially adverse effect on our earnings and on consolidated shareholders’ equity.

~~Table of Contents~~

~~Item 3.Quantitative and Qualitative Disclosures About Market Risk~~ ~~(continued)~~

We prefer to hold equity investments for very long periods of time so we are not troubled by short-term price volatility with respect to our investments. Market prices for equity securities are subject to fluctuation. Consequently, the amount realized in the subsequent sale of an investment may significantly differ from the reported market value. A hypothetical 10% increase or decrease in the market price of our investments would result in a respective increase or decrease in the carrying value of our investments of ~~$37,210~~$32,952 along with a corresponding change in shareholders’ equity of approximately 5%4%.

We have had minimal exposure to foreign currency exchange rate fluctuations in the first ~~nine months~~quarters of ~~2021~~2022 and ~~2020.~~

2021.

Southern Oil’s business is fundamentally a commodity business. This means Southern Oil’s operations and earnings may be significantly affected by changes in oil and gas prices. Such commodity prices depend on local, regional and global events or conditions that affect supply and demand for oil and gas. Any material decline in crude oil or natural gas prices could have a material adverse effect on Southern Oil’s operations.

Item 4. Controls and Procedures

Based on an evaluation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), our Chief Executive Officer and Controller have concluded that our disclosure controls and procedures were effective as of ~~September 30, 2021.~~March 31, 2022.

There have been no changes in our internal control over financial reporting that occurred during the quarter ended ~~September 30, 2021~~March 31, 2022 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Information in response to this Item is included in Note 13 to the Consolidated Financial Statements included in Part 1, Item 1 of this Form 10-Q and is incorporated herein by reference.

ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors as previously disclosed in Item 1A to the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

From August 10, 2021 through August 12, 2021, The Lion Fund II, L.P. purchased 1,618 shares of Class A common stock and 12,937 shares of Class B common stock. The Lion Fund II, L.P. may be deemed to be an “affiliated purchaser” as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended. The purchases were made through open market transactions.

Total Number of
Class A Shares
Purchased Average Price Paid
per Class A Share Total Number of
Class B Shares
Purchased Average Price Paid
per Class B Share Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs Maximum Number
of Shares That May
Yet Be Purchased
Under Plans or
Programs
July 1, 2021 – July 31, 2021 — $ — — $ — — —
August 1, 2021 – August 31, 2021 1,618 $ 850.71 12,937 $ 171.59 — —
September 1, 2021 – September 30, 2021 — $ — — $ — — —
Total 1,618 12,937 —

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS


Exhibit Number						Description

31.01						Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.02						Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.01*						Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101						Interactive Data Files.

104						Cover page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101)

_________________


*			Furnished herewith.

2726

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	Biglari Holdings Inc.

Date: ~~November 5, 2021~~May 6, 2022	By:	/s/ BRUCE LEWIS
		Bruce Lewis
		Controller

2827


	Total Number of Class A Shares Purchased	Average Price Paid per Class A Share		Total Number of Class B Shares Purchased	Average Price Paid per Class B Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares That May Yet Be Purchased Under Plans or Programs
July 1, 2021 – July 31, 2021	—	$	—	—	$	—	—	—
August 1, 2021 – August 31, 2021	1,618	$	850.71	12,937	$	171.59	—	—
September 1, 2021 – September 30, 2021	—	$	—	—	$	—	—	—
Total	1,618			12,937			—